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Universal Debt Payment Solutions, LLC, Universal Debt Solutions, LLC, WNY Account Solutions, LLC et al.

On March 26, 2015, the Bureau filed a complaint against a group of individuals, their companies, and their service providers alleging unlawful conduct related to a phantom debt collection operation. Phantom debt is debt consumers do not actually owe or debt that is not payable to those attempting to collect it. The Bureau alleges that the individuals, acting through a network of corporate entities, used threats and harassment to collect phantom debt from consumers, in violation of the FDCPA and the CFPA. The Bureau is seeking permanent injunctive relief, restitution, and the imposition of a civil money penalty. On April 7, 2015, the Bureau obtained a preliminary injunction against the debt collectors that froze their assets and enjoined their unlawful conduct.

On March 21, 2019, the court granted the Bureau’s motion for summary judgment on all its claims against five of the debt collector defendants, Marcus Brown, Mohan Bagga, Sarita Brown, Tasha Pratcher, and WNY Account Solutions, and one of its claims against two other debt collector defendants, Sumant Khan and S Payment Processing Solutions, LLC. The court denied the Bureau’s motion for summary judgment on its other claims against the latter two debt collector defendants and denied those two defendants’ motion for summary judgment against the Bureau.

On August 21, 2019, the court entered a stipulated final judgment and order as to Sumant Khan and S Payment Processing Solutions, LLC. Among other things, the August 21, 2019 stipulated judgment ordered those defendants to transfer all of the funds in their various bank accounts in partial satisfaction of a judgment of equitable monetary relief and damages in the amount of $633,710, which was partially suspended based on inability to pay, permanently banned the settling defendants from engaging in debt collection activities, and prohibited them from making certain misrepresentations.

On November 15, 2019, the court entered a stipulated final judgment and order as to Mohan Bagga. Among other things, the November 15, 2019 stipulated judgment imposed a suspended judgment against Bagga of equitable monetary relief and damages in the amount of $5,261,484, ordered him to pay a $1 civil money penalty, permanently banned him from engaging in debt collection activities, and prohibited him from making certain misrepresentations. The suspension of the judgment and the $1 civil money penalty are based on his inability to pay.

On December 15, 2020, the court entered a stipulated final judgment and order as to Tasha Pratcher. Among other things, the December 15, 2020 stipulated judgment imposed a $300,000 judgment against Pratcher of monetary relief and damages, which amount was suspended upon her payment of $2,500 and turnover of assets, ordered her to pay a $1 civil money penalty, permanently banned her from engaging in debt collection activities, and prohibited her from making certain misrepresentations. The suspension of the judgment and the $1 civil money penalty are based on her inability to pay. The court has appointed a receiver to, among other things, identify and conserve all frozen assets for future potential consumer redress. The receiver’s work is ongoing, and the case remains pending against the remaining defendants.

Related documents

Complaint

Stipulated final judgment and order - Khan and S Payment and Processing Solutions, LLC

Stipulated final judgment and order - Bagga

Stipulated final judgment and order - Pratcher

Press release

CFPB Sues Participants in Robo-Call Phantom Debt Collection Operation