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CFPB and New York Attorney General File Lawsuit Against Illegal Nationwide Debt Collection Scheme

Alleges Network of Sham Collections Companies Harass, Threaten, and Deceive Millions of Consumers

Washington, D.C. – Today the Consumer Financial Protection Bureau (CFPB), in partnership with the New York Attorney General, filed a lawsuit in a federal district court against the leaders of a massive debt collection scheme based out of Buffalo, N.Y. The lawsuit alleges Douglas MacKinnon and Mark Gray operate a network of companies that harass, threaten, and deceive millions of consumers across the nation into paying inflated debts or amounts they may not owe. The Bureau is seeking to shut down this illegal operation and to obtain compensation for victims and a civil penalty against the companies and partners.

“Our lawsuit asserts that millions of consumers were harassed, threatened, and deceived as part of a massive scheme to collect inflated debts,” said CFPB Director Richard Cordray. “Today we are taking action against the ringleaders of this operation so they can no longer prey upon vulnerable consumers. We are pleased to be working in partnership with New York Attorney General Schneiderman to hold these companies accountable.”

“Living with debt is difficult enough as it is, without the added stress of being harassed and threatened by debt collectors,” Attorney General Schneiderman said. “These collection shops inflated debts of their victims. This suit sends the message that debt collectors that employ abusive tactics will be held accountable.”

The CFPB and the New York Attorney General allege that Northern Resolution Group LLC, Enhanced Acquisitions LLC, and Delray Capital LLC are interrelated collections companies based in Buffalo, N.Y.  Together, the companies have purchased millions of dollars’ worth of consumer debt and collected some of those debts directly.  The companies were created, operated, and are overseen by Douglas MacKinnon and Mark Gray.

The complaint alleges that since at least 2009, Northern Resolution Group, Enhanced Acquisitions, and Delray Capital, operating under the supervision of MacKinnon and Gray, have served as the lynchpin of a massive collections scheme. The operation routinely inflates consumer debts and relies on illegal tactics to extract as much money as possible from consumers for debts. MacKinnon also set up a network of at least 60 additional fly-by-night debt-collection firms to collect on the large debt portfolios purchased by Northern Resolution Group, Enhanced Acquisitions, and Delray Capital. This elaborate network also served as “window dressing,” or a workaround, when other debt sellers would no longer do business with the defendants. 

The CFPB alleges that the defendants violated the Fair Debt Collection Practices Act. The CFPB and the New York Attorney General also allege that the defendants violated the Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibits unfair and deceptive acts or practices in the consumer financial marketplace. Specifically, the CFPB and the New York Attorney General allege that MacKinnon, Gray, and their network of debt collection companies:

  • Inflated consumer debts and misrepresented amounts consumers owed: The defendants misrepresented to consumers that they owed sums they did not owe, were not obligated to pay, or that the companies did not have a legal right to collect. Specifically, Northern Resolution Group, Enhanced Acquisitions, and Delray Capital illegally added $200 to each consumer debt account they acquired, regardless of whether applicable state law or the underlying contract between the consumer and the original issuer permitted such fees or charges. In some cases, the scheme further inflated the amounts owed by tacking on additional unauthorized fees and charges to the debts.  At times, some collectors quoted consumers balances that exceeded 600 percent of the debt amount.
  • Falsely threatened legal action: The companies falsely threatened consumer with legal action that the collectors had no intention of taking. In reality, they never referred a case for prosecution.  In some cases the companies falsely accused consumers of committing crimes. Further, the companies lied to some consumers, claiming that they would be arrested to pressure them to pay debts. In one case, the companies instructed a consumer that she did not even have time to get a lawyer because she would be arrested the next day. These deceptive practices could also have affected the relative priority consumers gave to competing financial commitments.
  • Impersonated law-enforcement officials, government agencies, and court officers: The companies faked calls and emails to make it appear the communications were coming from government or court officials. The companies used call-spoofing technologies to make it appear that collectors were calling from government agencies.  The collection agents would barrage consumers and relatives with calls, claiming to be a government official who could arrest the consumer for non-payment of the debt. The companies also used emails to pretend they were contacting consumers and their family from a court.

The complaint also alleges repeated fraudulent acts and deceptive acts or practices in violation of New York law, as well as violations of New York state debt-collection law.

According to the complaint, MacKinnon and Gray have known about, directed, and encouraged these illegal collections practices and have profited significantly—amounting to tens of millions of dollars annually. These illegal profits have been funneled back to MacKinnon, his relatives, and Gray through payments to various sham companies that MacKinnon, Gray, and MacKinnon’s relatives controlled.

Through this lawsuit, the Bureau seeks to stop the alleged unlawful practices of MacKinnon, Gray, Northern Resolution Group LLC, Enhanced Acquisitions LLC, and Delray Capital LLC.  The Bureau has also requested that the court impose penalties on the company and its partners for their conduct and require that compensation be paid to consumers who have been harmed. The CFPB’s complaint is not a finding or ruling that the defendants have actually violated the law.

The full text of the complaint can be found at:

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit