Attorney General John Suthers charged United Credit Recovery in Sanford, Fla., with producing fraudulent documents the firm used to pursue repayment of charged-off credit accounts it had purchased from two banks.
Suthers also charged two Colorado firms, GTF Services and Standley and Associates, both of Westminster, with having purchased and used the documents when seeking to collect on the charged-off accounts that firm also bought.
None of the firms has yet responded to requests for comment about the litigation.
“UCR faked bank officer signatures on documents to orchestrate a debt-for-sale scheme from which they handsomely profited,” Suthers said in his announcement.
“The scheme involved thousands of individual accounts totaling tens of millions of dollars,” the Colorado attorney general said.
According to the complaint, UCR purchased consumer debt from Wells Fargo and US Bank and then used account information provided by the banks to create hundreds of thousands of fake affidavits purporting to describe and to verify debt owed by consumers. UCR profited by using the fake affidavits in collecting on the debt and in reselling debt to third-party collectors.
The complaint did not reveal any debt purchased from credit unions, though UCR said on its website it is “is a direct purchaser of distressed assets and charged-off receivables. Our clients include banking institutions, credit unions, industrial banks, credit card issuers, telecom, municipalities and merchants.”
The company has not yet responded to a request for an estimate of the general number and location of its credit union clients.
According to the complaint, UCR purchased hundreds of millions of dollars’ worth of closed checking accounts which still carried overdraft and other fee charge from both Wells Fargo and US Bank.
The complaint states that the purchases were made without many account details or documents. Instead each bank provided “a spreadsheet containing information regarding each conveyed account, such as the account holder’s name and address, Social Security number, amount of debt owed, and the charge-off date.”
UCR could request documents about individual accounts, but only at an additional charge, and firms which purchased the accounts in turn from UCR could not request any additional information, according to the complaint. The complaint alleges UCR received authentic documents from the banks in some instances, but in many others falsely created documents including forging signatures of bank officers as well as notarization.