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IN THE MATTER OF: RECEIVABLES MANAGEMENT
SOLUTIONS INCORPORATED ("Respondent") * * * * * * * * * * * * * * * * * * * * *
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AMENDED AND RESTATED |
I. LEGAL AUTHORITY AND JURISDICTION
The Banking Commissioner (“Commissioner”) is charged with the administration of Part XII of Chapter 669, Sections 36a-800 to 36a-810, inclusive, of the Connecticut General Statutes, “Consumer Collection Agencies”, and the regulations promulgated thereunder (Sections 36a-809-6 to 36a-809-17, inclusive, of the Regulations of Connecticut State Agencies) (“Regulations”).
Pursuant to the authority granted by Section 36a-17(a) of the Connecticut General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated the activities of Respondent to determine if it has violated, is violating or is about to violate the provisions of the Connecticut General Statutes or Regulations within the jurisdiction of the Commissioner.
Section 36a-17(a) of the Connecticut General Statutes provides, in pertinent part, that:
The commissioner, in the commissioner’s discretion, may, subject to the provisions of section 36a-21 and the Freedom of Information Act, as defined in section 1-200; (1) make such public or private investigations or examinations within or outside this state, concerning any person subject to the jurisdiction of the commissioner, as the commissioner deems necessary to carry out the duties of the commissioner . . . .
As a result the investigation, on May 17, 2013, the Commissioner issued a Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Consumer Collection Agency License, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing (“Notice”), which Notice is hereby amended and superseded.
As a result of further investigation by the Division to determine if Respondent has violated, is violating or is about to violate the provisions of the Connecticut General Statutes or Regulations within the jurisdiction of the Commissioner, the Commissioner finds that facts exist that warrant, pursuant to Section 36a-1-22 of the Regulations of Connecticut State Agencies, the issuance of this Amended and Restated Notice of Automatic Suspension, Amended and Restated Temporary Order to Cease and Desist, Amended and Restated Notice of Intent to Revoke Consumer Collection Agency License, Amended and Restated Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing.
Section 36a-1-22 of the Regulations of Connecticut State Agencies provides, in pertinent part, that:
The commissioner may amend the notice of hearing at any stage of the contested case prior to the close of evidence.
Section 36a-52 of the Connecticut General Statutes provides, in pertinent part, that:
(a) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of the general statutes within the jurisdiction of the commissioner, or any regulation . . . adopted . . . thereunder, the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the person on the earlier of the date of actual receipt, or seven days after mailing or sending. Any such notice shall include: (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes, [or] regulations . . . alleged to have been violated; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice. If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice, unless the person fails to appear at the hearing. After the hearing, the commissioner shall determine whether an order to cease and desist should be issued against the person named in the notice. If the person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall issue an order to cease and desist against the person. No such order shall be issued except in accordance with the provisions of chapter 54.
(b) If the commissioner finds that the public welfare requires immediate action, the commissioner may incorporate a finding to that effect in the notice sent in accordance with subsection (a) of this section and issue a temporary order requiring the person to cease and desist from the activity which constitutes such alleged violation and to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section. Such temporary order shall become effective on receipt and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in the notice.
Section 36a-51 of the Connecticut General Statutes provides, in pertinent part, that:
(a) The commissioner may . . . revoke . . . any license issued by the commissioner under any provision of the general statutes by sending a notice to the licensee by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the licensee on the earlier of the date of actual receipt or seven days after mailing or sending. Any such notice shall include: (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes, [or] regulations . . . involved; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that the licensee may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice. . . .
(b) If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless the licensee fails to appear at the hearing. After the hearing, the commissioner shall . . . revoke . . . the license for any reason set forth in the applicable licensing provisions of the general statutes if the commissioner finds sufficient grounds exist for such . . . revocation . . . . If the licensee does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall . . . revoke . . . the license. No such license shall be . . . revoked except in accordance with the provisions of chapter 54.
Section 36a-50(a) of the Connecticut General Statutes provides, in pertinent part, that:
(1) Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, or any regulation . . . adopted . . . thereunder, the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending. Any such notice shall include: (A) A statement of the time, place, and nature of the hearing; (B) a statement of the legal authority and jurisdiction under which the hearing is to be held; (C) a reference to the particular sections of the general statutes, [or] regulations . . . alleged to have been violated; (D) a short and plain statement of the matters asserted; (E) the maximum penalty that may be imposed for such violation; and (F) a statement indicating that such person may file a written request for a hearing on the matters asserted not later than fourteen days after receipt of the notice.
(2) If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless such person fails to appear at the hearing. After the hearing, if the commissioner finds that the person has violated any such provision, [or] regulation . . . the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by law, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person. If such person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner may, as the facts require, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.
(3) Each action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54.
Section 36a-802 of the Connecticut General Statutes provides, in pertinent part, that:
(a) No such [consumer collection agency] license and no renewal thereof shall be granted unless the applicant has filed with the commissioner a bond to the people of the state in the penal sum of twenty-five thousand dollars, approved by the Attorney General as to form and by the commissioner as to sufficiency of the security thereof. . . . The bond shall run concurrently with the period of the license granted to the applicant, and the aggregate liability under the bond shall not exceed the penal sum of the bond.
(b) The surety company shall have the right to cancel the bond at any time by a written notice to the licensee stating the date cancellation shall take effect. Such notice shall be sent by certified mail to the licensee at least thirty days prior to the date of cancellation. A surety bond shall not be cancelled unless the surety company notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation. After receipt of such notification from the surety company, the commissioner shall give written notice to the licensee of the date such bond cancellation shall take effect. The commissioner shall automatically suspend the license on such date, unless the licensee prior to such date submits a letter of reinstatement of the bond from the surety company or a new bond or the licensee has ceased business and has surrendered its license. After a license has been automatically suspended, the commissioner shall give the licensee notice of the automatic suspension pending proceedings for revocation . . . and an opportunity for a hearing on such actions in accordance with section 36a-51 and require the licensee to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section.
Section 4-182(c) of the Connecticut General Statutes provides, in pertinent part, that:
No revocation, suspension, annulment or withdrawal of any license is lawful unless, prior to the institution of agency proceedings, the agency gave notice by mail to the licensee of facts or conduct which warrant the intended action, and the licensee was given an opportunity to show compliance with all lawful requirements for the retention of the license.
II. MATTERS ASSERTED
| 1. |
Respondent is a Minnesota corporation with an office at 260 East Wentworth Avenue, W. St. Paul, Minnesota (“W. St. Paul Office”). |
| 2. |
On October 31, 2011, Respondent filed an application for a license to act as a consumer collection agency in Connecticut from the W. St. Paul Office for the October 1, 2011 through September 30, 2013 renewal period. Such license was issued on February 3, 2012. |
| 3. |
On January 2, 2013, the Division sent a letter of examination and a Consumer Collection Agency Uniform Manager’s Questionnaire (“MQ”) via e-mail to Robert Dunham, President of Respondent. |
| 4. |
On March 18, 2013, the Commissioner received notice from Travelers Casualty and Surety Company of America that bond number 775204893 CT issued on behalf of Respondent with respect to its consumer collection agency license for the W. St. Paul Office would be cancelled, effective on May 1, 2013.
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| 5. | On March 26, 2013, the Division sent a certified letter to Mr. Dunham advising him that the Division had not received a response to its January 2, 2013 letter, and that if no response was received by April 5, 2013, the Commissioner may initiate administrative action against Respondent. |
| 6. | On April 2, 2013, pursuant to Section 4-182(c) of the Connecticut General Statutes, the Division sent a letter to Respondent concerning the bond cancellation notice, as more fully described in paragraph 4 above, and giving Respondent an opportunity to show compliance with all lawful requirements for retention of its consumer collection agency license in Connecticut. |
| 7. | On April 18, 2013, an examiner with the Division received an e-mail from Mr. Dunham. In the e-mail Mr. Dunham stated, in part, that “[i]n reviewing the questionnaire is it really necessary I complete it? As I informed you by phone . . . [Respondent] is no longer in business. I simply need our license to be suspended or terminated”. |
| 8. | On April 19, 2013, the examiner e-mailed Mr. Dunham a reduced MQ and the Regulations pertaining to termination of a consumer collection agency license. In such e-mail, the examiner informed Mr. Dunham that the section of the MQ regarding financial information needed to be completed. |
| 9. | On April 23, 2013, Mr. Dunham e-mailed the MQ to the examiner and stated that Respondent had ceased operations as of April 1, 2013, and that all bank accounts had been closed. |
| 10. | On April 24, 2013, the examiner sent an e-mail to Mr. Dunham to inform him that the financial information section of the MQ had not been completed and that the financial information and regulatory compliance section of the MQ was to be completed. |
| 11. | On April 24, 2013, Mr. Dunham e-mailed the examiner and asked “[c]an you tell me what questions that you are looking for me to answer or what documents you want to see? Again, I am surrendering the agency license due to the company has closed. What’s the point of the audit at this time?” |
| 12. | On April 24, 2013, the examiner responded to Mr. Dunham and informed him that the Division was examining Respondent’s collection activity for the time period when Respondent was licensed and highlighted the questions on the MQ that needed to be answered. |
| 13. | To date, Respondent has failed to file with the Commissioner a letter of reinstatement of the bond or a new bond and has not surrendered its license. |
| 14. | The Commissioner automatically suspended Respondent’s consumer collection agency license in Connecticut for the W. St. Paul Office effective on May 1, 2013. |
| 15. | On May 3, 2013, the Division sent a letter to Respondent concerning the failure to respond to the MQ and giving Respondent an opportunity to show compliance with all lawful requirements for retention of its consumer collection agency license in Connecticut. To date no response has been received by the Division. |
III. STATUTORY BASIS FOR REVOCATION OF CONSUMER
COLLECTION AGENCY LICENSE, ORDER TO CEASE AND DESIST
AND ORDER IMPOSING CIVIL PENALTY
Section 36a-804 of the Connecticut General Statutes provides, in pertinent part, that:
(a) The commissioner may . . . revoke . . . any [consumer collection agency] license . . . , in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for a license under sections 36a-800 to 36a-810, inclusive, or if the commissioner finds that the licensee or any proprietor, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has . . . (3) violated any of the provisions of sections 36a-800 to 36a-810, inclusive . . . .
(b) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any of the provisions of sections 36a-800 to 36a-810, inclusive, . . . the commissioner may take action against such person . . . in accordance with section . . . 36a-52.
Section 36a-17(d) of the Connecticut General Statutes provides, in pertinent part, that:
Any person who is the subject of any such . . . examination . . . [under Section 36a-17(a)] shall . . . otherwise cooperate with the commissioner.
| 1. |
Respondent’s failure to maintain a surety bond that runs concurrently with the period of its consumer collection agency license, as more fully described in paragraphs 2, 4, 6 and 13 of the Matters Asserted, would constitute sufficient grounds for the Commissioner to deny an application for such license pursuant to Section 36a-802(a) of the Connecticut General Statutes and constitutes a violation of Section 36a-802(a) of the Connecticut General Statutes, both of which constitute sufficient grounds for the Commissioner to revoke Respondent’s license to act as a consumer collection agency in Connecticut from the W. St. Paul Office pursuant to Sections 36a-804(a) and 36a-804(a)(3) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, and forms a basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-804(b) and 36a-52(a) of the Connecticut General Statutes. |
| 2. |
Respondent’s failure to fully cooperate with the Commissioner during the course of an examination, as more fully described in paragraphs 3, 5, 7 through 12, inclusive, and 15 of the Matters Asserted, constitutes a violation of Section 36a-17(d) of the Connecticut General Statutes. Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Section 36a-50(a) of the Connecticut General Statutes. Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation. |
IV. FINDING AND STATUTORY BASIS FOR
TEMPORARY ORDER TO CEASE AND DESIST
The Commissioner finds that public welfare requires immediate action to issue a temporary order requiring Respondent to cease and desist from violating Sections 36a-802(a) and 36a-52(b) of the Connecticut General Statutes, in that due to Respondent’s failure to maintain its surety bond, any consumer debtor or creditor who may be damaged by Respondent’s wrongful conversion of funds paid by consumer debtors, will not be able to proceed on such surety bond to recover damages.
V. AMENDED AND RESTATED NOTICE OF AUTOMATIC SUSPENSION, AMENDED
AND RESTATED TEMPORARY ORDER TO CEASE AND DESIST, AMENDED AND
RESTATED NOTICE OF INTENT TO REVOKE CONSUMER COLLECTION
AGENCY LICENSE, AMENDED AND RESTATED NOTICE OF INTENT TO
ISSUE ORDER TO CEASE AND DESIST, NOTICE OF INTENT TO
IMPOSE CIVIL PENALTY AND NOTICE OF RIGHT TO HEARING
WHEREAS, the Commissioner has reason to believe that Respondent has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to revoke its consumer collection agency license in Connecticut for the W. St. Paul Office pursuant to Sections 36a-804(a) and 36a-804(a)(3) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, and forms a basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-804(b) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty upon Respondent pursuant to Section 36a-50(a) of the Connecticut General Statutes;
AND WHEREAS, the Commissioner has made the finding required under Section 36a-52(b) of the Connecticut General Statutes.
NOW THEREFORE, pursuant to Section 36a-802(b) of the Connecticut General Statutes, the Commissioner gives NOTICE that on May 1, 2013, the license of Receivable Management Solutions Incorporated to act as a consumer collection agency in Connecticut from 260 East Wentworth Avenue, W. St. Paul, Minnesota, was AUTOMATICALLY SUSPENDED pending proceedings for revocation.
THE COMMISSIONER ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that Receivable Management Solutions Incorporated immediately CEASE AND DESIST from violating Section 36a-802(a) of the Connecticut General Statutes. This Amended and Restated Temporary Order shall become effective upon receipt by Receivable Management Solutions Incorporated, and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Amended and Restated Temporary Order to Cease and Desist.
FURTHER, notice is hereby given to Respondent that the Commissioner intends to REVOKE Respondent’s license to act as a consumer collection agency in Connecticut from the W. St. Paul Office, issue an order requiring Respondent to CEASE AND DESIST from violating Sections 36a-17(d) and 36a-802(a) of the Connecticut General Statutes, and impose a CIVIL PENALTY upon Respondent as set forth herein, subject to its right to a hearing on the allegations set forth above.
A hearing will be granted to Respondent if a written request for a hearing is received by the Department of Banking, Consumer Credit Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following Respondent’s receipt of this Amended and Restated Notice of Automatic Suspension, Amended and Restated Temporary Order to Cease and Desist, Amended and Restated Notice of Intent to Revoke Consumer Collection Agency License, Amended and Restated Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing, as set forth in subsections (a) and (b) of Section 36a-51 and Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes. This Amended and Restated Notice of Automatic Suspension, Amended and Restated Temporary Order to Cease and Desist, Amended and Restated Notice of Intent to Revoke Consumer Collection Agency License, Amended and Restated Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing shall be deemed received on the earlier of the date of actual receipt, or seven days after mailing or sending. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”. Once a written request for hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a hearing officer and sets the date of the hearing in accordance with Section 4-177 of the Connecticut General Statutes and Section 36a-1-21 of the Regulations of Connecticut State Agencies. If a hearing is requested, the hearing will be held on July 17, 2013, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
The hearing will be held in accordance with the provisions of Chapter 54 of the Connecticut General Statutes, unless Respondent fails to appear at the requested hearing. At such hearing, Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
If Respondent does not request a hearing within the time prescribed, the Commissioner will issue an order revoking Respondent’s license to act as a consumer collection agency in Connecticut from 260 East Wentworth Avenue, W. St. Paul, Minnesota, issue an order that Respondent cease and desist from violating Sections 36a-17(d) and 36a-802(a) of the Connecticut General Statutes, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollar ($100,000) per violation be imposed upon Respondent.
this 7th of June 2013. ________/s/_________
Howard F. Pitkin
Banking Commissioner
CERTIFICATION
I hereby certify that on this 10th day of June 2013, the foregoing Amended and Restated Notice of Automatic Suspension, Amended and Restated Temporary Order to Cease and Desist, Amended and Restated Notice of Intent to Revoke Consumer Collection Agency License, Amended and Restated Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Receivables Management Solutions Incorporated, Attention: Cheryl Fink, 260 East Wentworth Avenue, W. St. Paul, Minnesota 55118, certified mail no. 70123050000216929614.
________/s/_________
Doniel Kitt
Prosecuting Attorney