The Circles collectors: threats of arrest, and calls to everyone you know
A group of debt collection companies near Buffalo told people they could be arrested, called their relatives, employers and Facebook friends to spread word of the debt, and called the debtors every day. In 2022 the CFPB and the New York Attorney General obtained a court judgment banning the companies and their owners from debt collection and imposing $4 million in civil penalties.
A public record, not a client of this firm. The facts on this page come from the federal complaint, the agencies' announcements and the court's docket, cited at the end. The conduct described is what the government alleged; the case ended in a stipulated judgment. Usher Law Group did not represent anyone in this matter, we publish no results of our own, and nothing here predicts the outcome of any other case.
The collectors had a name for it. They called it "Circles."
According to the complaint the Consumer Financial Protection Bureau and the New York Attorney General filed on September 8, 2020, collectors working out of a building in Getzville, just outside Buffalo, would start a new account by looking up the person who owed the debt. Then they looked up everyone around that person. Skip-tracing software and social media gave them the consumer at the center and rings of other people around: parents, grandparents, in-laws, ex-spouses, employers, co-workers, landlords, Facebook friends.
The collectors then called those people. The stated reason was to find the consumer, even though, the complaint says, they already had the consumer's address. On those calls they signaled that the person was in debt or in trouble. The goal, in the words the complaint quotes from the operation itself, was to "stir the pot," so that family and co-workers would start calling the consumer, an "army" doing the collector's work. Only after that did the collector call the consumer.
The companies were JPL Recovery Solutions, Regency One Capital, ROC Asset Solutions, Check Security Associates, Keystone Recovery Group and later Bluestreet Asset Partners, operating under several other trade names. The owners named were Christopher Di Re, Scott Croce and Susan Croce, and the managers Brian Koziel and Marc Gracie. The complaint put the operation's revenue at about $10 million in 2015 and more than $23 million in 2018.
What the government said the collectors did
- Threats of arrest and jail. Collectors told people they would face wage garnishment, attachment of property, or arrest and imprisonment if they did not pay. The complaint says the threats were false, that consumers are not subject to arrest for unpaid debts, and that docket searches found no collection lawsuits filed by any of the companies.
- Calls to family, friends and employers. The Circles approach, used even after a consumer had asked the collector to stop. Consumers called it a "smear campaign" and "extortion."
- Calls every day. The complaint describes a "zero gap" policy: press the consumer every single day, even after a live conversation, and let the consumer hang up so the call log shows a disconnect, then call back the next day.
- Calls at work after being told not to. Multiple consumers said collectors kept calling their workplace after being told the employer prohibited it.
- Inflated balances. On certain payday-loan accounts, collectors quoted the full "total of payments" on the loan as if it were owed, then offered the real balance as a limited-time discount.
- No validation notice. Consumers said they never received the written notice of the amount, the creditor and their dispute rights that the FDCPA requires.
What the law says
Nearly every item on that list has its own line in the Fair Debt Collection Practices Act.
| Alleged conduct | What the FDCPA says |
|---|---|
| Threat of arrest or jail | A representation that nonpayment will result in arrest or imprisonment is false and misleading (15 U.S.C. § 1692e(4)) |
| Threat of garnishment with no lawsuit | A threat to take action that cannot legally be taken or is not intended (§ 1692e(5)) |
| Calls to relatives and friends | Third parties may be contacted only for location information, and the collector may not say the consumer owes a debt (§§ 1692b, 1692c(b)) |
| Calls at work | No calls at work if the collector knows or has reason to know the employer prohibits them (§ 1692c(a)(3)) |
| Daily calls meant to wear you down | Repeated or continuous calls with intent to annoy, abuse or harass (§ 1692d(5)) |
| Inflated balance | False representation of the amount of a debt (§ 1692e(2)(A)); collecting an amount not authorized (§ 1692f(1)) |
| No validation notice | Written notice within five days after the first communication (§ 1692g(a)) |
Since November 2021, Regulation F adds two specific rules. A collector who places more than seven telephone calls in seven days about one debt, or calls within seven days after a phone conversation about it, is presumed to be harassing (12 C.F.R. § 1006.14(b)(2)). And a collector may not communicate through a social media platform that the public or your contacts can see (§ 1006.22(f)(4)). New York's General Business Law § 601 separately lists prohibited collection practices, enforced by the Attorney General; consumers generally sue under GBL § 349.
What the court and the agencies did
The case was filed in the U.S. District Court for the Western District of New York (No. 1:20-cv-01217). On May 23, 2022 the agencies announced a proposed stipulated judgment, and the court's stipulated final judgment and order was filed on May 25, 2022. The companies, the owners and the senior managers must exit the debt collection business permanently. They were ordered to pay a $2 million civil penalty to the CFPB and $2 million to the New York Attorney General, each rising to $2.5 million if not paid on time.
The CFPB's director said it is illegal for collectors "to orchestrate smear campaigns using social media to extort consumers into paying up."
CFPB and New York AG v. JPL Recovery Solutions
Two $2 million civil penalties, one to each agency, and a permanent ban from debt collection for the companies, their owners and senior managers.
Source: CFPB enforcement action. A public record of someone else's case, not a result of this firm and not a prediction.
What it means for you now
A government case like this one stops a company. It does not decide your own claim. If a collector threatened you with arrest, called your family or your boss, or called you every day, you may have a private claim under the FDCPA for actual damages plus statutory damages of up to $1,000, and in New York under GBL § 349. The FDCPA requires a collector found liable to pay the consumer's reasonable attorney's fees and costs.
- Write it down now. Date, time, number, who called, and exactly what was said. Ask your relatives and co-workers to do the same for calls they got. The call log keeps the record on your phone.
- Save everything. Voicemails, texts, screenshots of social media messages, and any letter, or the absence of one.
- Mind the year. An FDCPA claim must be filed within one year of each violation.
The pages on threats of arrest or jail and calls to your family and employer go through each rule. For New York's own rules, see New York law.
The pages this story points to
Threats of arrest or jail
Why you cannot be jailed for a consumer debt, and what the threat is worth.
Read →Calls to family and employer
The narrow location exception and everything it does not allow.
Read →Too many calls
The seven-in-seven presumption and how to prove a pattern.
Read →Sources. Complaint, CFPB and People of the State of New York v. JPL Recovery Solutions, LLC, No. 1:20-cv-01217 (W.D.N.Y. filed Sept. 8, 2020), PDF; Stipulated final judgment and order (filed May 25, 2022); CFPB, CFPB and New York Attorney General Shut Down Debt Collection Ring (May 23, 2022); New York Attorney General, press release (Sept. 8, 2020); CFPB, enforcement action page.
Common questions
Can I be arrested for not paying a credit card or payday loan?
No. The CFPB's complaint in this case says it plainly: consumers are not subject to arrest or imprisonment for failing to pay debts. A collector who says otherwise violates the FDCPA, which bans threats of arrest and threats of action that cannot legally be taken. Ignoring a court order in a case you lost is a separate matter, and it starts with a lawsuit you would be served with.
Is it legal for a collector to call my mother or my boss?
Only to get your address or phone number, and even then the collector may not say you owe a debt. A collector may not keep calling your workplace if it knows your employer prohibits the calls. Calling people to shame you into paying, as the complaint says happened here, is what the law forbids.
Did the people who were called get money from this case?
The CFPB's $2 million penalty goes to the CFPB's victims relief fund, according to the agency's announcement. The judgment did not decide any individual consumer's own claim. A person who was contacted this way could have had a private FDCPA claim, subject to its one-year deadline.
Tell us what they did.
One conversation with an attorney, in your language. We tell you which laws the collector or the credit bureau broke, which deadline runs first, and what to save this week. If it is not a case we can take, we say so and tell you where to go.
(718) 484-7510The FDCPA and the FCRA require a company found liable to pay the consumer’s reasonable attorney’s fees and costs. Our fee arrangement is confirmed in a written retainer before we begin. English, Russian and Spanish in-house; an interpreter for any other language.