CFPB and NY AG Go After Hidden Assets of Now Defunct Debt Collection Scheme

On April 22, 2021, the CFPB announced that it filed a complaint in federal court to seize a $1.6 million home; the ownership of which it alleges was transferred fraudulently by the operator of a massive and now-defunct debt-collection scheme.

In 2019, the CFPB and New York Attorney General reached a settlement with Douglas MacKinnon, Northern Resolution Group, LLC, Enhanced Acquisitions, LLC, Delray Capital, LLC, and Mark Gray. The CFPB had sued Douglas MacKinnon, Mark Gray, and their companies for harassing, threatening, and deceiving millions of consumers across the nation into paying inflated debts or amounts they did not owe. The companies routinely added $200 to each debt they purchased and attempted to collect, used spoofing technology to make it appear as though they were calling from government agencies, and sent threatening messages to consumers to frighten them into paying. MacKinnon and his companies were permanently banned from the debt collection industry and ordered to pay $60 million in consumer redress and penalties.

The new complaint alleges that Douglas MacKinnon transferred ownership of his home to his wife and daughter for the sum of $1 shortly after learning of the federal and state investigation into his companies. It then asks the court to declare the transfer void and order the seizure and sale of the property to partially repay MacKinnon’s outstanding debt to the federal and state governments for his illegal conduct.

“Douglas MacKinnon operated a brazen scheme, fraudulently inflating consumers’ debts, and he was equally brazen in trying to fraudulently conceal his own assets,” said CFPB Acting Director Dave Uejio. “Today’s action shows that attempts to defraud the federal government and evade the consequences of breaking the law will not succeed. I thank Attorney General James for her partnership in shutting down this scheme and in bringing MacKinnon to account.”

insideARM Perspective:

This complaint is more proof that Acting Director Uejio means business. The CFPB will continue to seek out and punish bad actors, and those caught committing such actions will not be able to skate on restitution and fines.  Further, this move indicates the CFPB does not consider its job complete once it reaches a settlement and intends to see bad actors pay their penalties. Bad actors do nothing to foster a culture of compliance within the industry. Good actors in the accounts receivable industry should support the CFPB in its efforts to see that real punishments are delivered to those who exploit the industry for personal gain.