Attorney General shuts down Amherst collection businesses, raises $ 1.2 million

AMHERST, NY (WIVB) – Attorney General Letitia James is shutting down a debt collection firm in Amherst that the AG accused of using bogus and deceptive tactics to crush consumers.

The attorney general described the operation in Amherst as an illegal debt collection scheme because it involved three companies, all owned by the same businessman who has been in his agency’s sights for at least two years.

All three companies, including Northwood Management Group, LLP, operated out of a building in the College Park office complex. The owner of the three companies, Andrew Fanelli, signed what is called an interruption insurance, agreeing to shut down all three companies and pay more than $ 1 million in penalties.

“Things like telling someone they could go to jail for unpaid debt or have their license suspended for a payday loan. It’s just not true, we don’t have debtor prisons anymore, ”said Christopher Boyd, Deputy Attorney General.

Deputy Attorney General Christopher Boyd led Northwood Management’s investigation, which was detected by their radar screen two years ago. Owner Andrew Fanelli was collecting debts for fundraising mainstay Douglas MacKinnon when Attorney General Letitia James shut down Operation MacKinnon in 2019.

Christopher Boyd told us that Northwood management has mainly focused on high interest debt, such as payday loans, even loans that have been written off.

“So this is older debt, high interest debt that is bought very cheaply from the original creditor, so pennies on the dollar,” Boyd added.

But Andrew Fanelli’s attorney, Eric Soehnlein, issued a brief statement telling us in part that the settlement does not include any finding or admission of wrongdoing and provides financially advantageous terms. That Fanelli intended to withdraw from the company even before the settlement.

“When the Attorney General began his investigation, Mr. Fanelli was already considering leaving the collection industry. After learning about the investigation, he made a pragmatic business decision and chose to resolve the case to focus on other business activities.

Notably, the settlement does not include any finding or admission of wrongdoing on behalf of Mr. Fanelli, it provides financially advantageous terms and explicitly allows him to remain in the collection industry for six months to terminate his activities. He looks forward to new ventures in the near future.

Eric M. Soehnlein, partner, Lippes Mathias LLP Avocats

But Boyd said these bogus threats have had a real impact on people’s lives.

“They’re having a hard time paying the rent, putting food on the table and coming up with a false threat that you’re going to be arrested unless you pay off one of those old high interest debts, that’s really inadmissible, ”Boyd said. noted.

The Attorney General enforces a number of federal and state laws that protect consumers from deceptive debt collectors. For more information, click here.

Al Vaughters is an award-winning investigative journalist who has been on the News 4 team since 1994. See more of his work here. To submit a Call 4 action, click here.

Gladys T. Hensley