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Please excuse this question if I've overlooked obvious options, but I'm not an American citizen and I live outside of the USA, so I'm not familiar with American legal system, or agencies who might be of assistance.

I hired a debt collection agency based in New York to collect a debt owed to me (just over $2k) by an American citizen in California in January 2017. Initially they seemed professional enough but I noticed at first I never received statements – the only way I received updates on the status of the account was if I phoned them or emailed them to request a statement. However, they were slowly recovering the money so I didn't think too much of it.

The last time I called them was in June 2018 and was told around $230 was still outstanding. A little while later the debtor contacted me privately to let me know he had the funds. I'm not sure if he settled the account with them or wanted to pay me privately – I ignored his mail because the debt collectors told me not to communicate privately with him.

However, as of the last two months the agency are not responding to my emails or voice mails. Their website's domain is expired, there are 8 complaints against them at the Better Business Bureau about them not paying their clients back. There are also two google reviews and comments on their Facebook page where former clients complain about exactly what I'm experiencing right now – being ignored after their debts were settled and not receiving their money back.

It's starting to look like this agency may be scamming people.

  1. Are there any law enforcement agencies or government bodies in the USA I could contact to report them to? If nothing else, these people need to be stopped – debt collectors who behave in such a way that they themselves need to be reported to debt collectors, aren't very useful.
  2. Is there any way for me to recover my money? One of the people who commented on their Facebook page mentioned starting a class action law suit: Would it be possible for me to join this given my location and citizenship status?
  • New York has strong consumer protection laws concerning debt collectors, but I suspect that these would not apply because your debtor was in California. Still, the New York attorney general might be interested in knowing about your experiences as a client of this company, particularly if the company defrauded you or if they are already investigating it because of another case. You might start at ag.ny.gov/feature/debt-settlement-companies. – phoog Oct 10 '18 at 19:16
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Are there any law enforcement agencies or government bodies in the USA I could contact to report them to? If nothing else, these people need to be stopped - debt collectors who behave in such a way that they themselves need to be reported to debt collectors, aren't very useful.

There is usually a state agency that regulates debt collections with whom a complaint can be filed, not infrequently, the state attorney general.

Law enforcement would generally decline to do anything as this would be considered a "civil matter."

Is there any way for me to recover my money? One of the people who commented on their Facebook page mentioned starting a class action law suit - would it be possible for me to join this given my location and citizenship status?

There is no cost effective way for you to recover your money from them. The most plausible alternative would be to force an involuntary bankruptcy, but this is not cost effective for you given the small amount still owed. You could join a class action in most circumstances even though you are not a U.S. citizen, but it would not be cost effective for you to make any effort to start one.

Your best bet to get some money would be to call the debtor personally, to ask him to send you the $230, and to explain that the debt collection agency is now defunct. You should also send a letter to the debt collection agency terminating its services and saying that you have collected the balance owed to you directly from the debtor to mitigate your damages from its non-performance.

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You can (and should) file a formal complaint with the FTC's Consumer Financial Protection Bureau. From Wikipedia:

In the United States, consumer third-party agencies are subject to the federal Fair Debt Collection Practices Act of 1977 (FDCPA), is administered by the Federal Trade Commission (FTC).

You can also file a formal complaint with the district or state attorney that has jurisdiction over the current (or former) physical location of company.

If a class action was started against the company, it sounds like you would likely be included in the plaintiff class – normally those do not exclude claimants due to location or citizenship. However, since you are not physically in the U.S. you would probably not be an attractive class representative.

Meanwhile, for purposes of drafting complaints and attempting to recover any money that was not stolen by the debt collector, you should contact the debtor to obtain evidence supporting your complaints: e.g., can the debtor send you cancelled checks showing how much he remitted to the debt collector and under what terms? The first question anyone pursuing a claim will ask is whether the debt collector absconded with money (which means their behavior was criminal) as opposed to simply going out of business.

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