State banking regulators have temporarily suspended the license of a Waterbury collection agency, alleging that the agency misused funds collected for creditors.
Accelerated Collection Systems Inc. was issued a temporary cease-and-desist order by the state Department of Banking after the company refused to grant regulators access to its records, a violation of state law.
According to the order, regulators allege that in October Accelerated "commingled money collected for creditors with its own funds and used creditors’ money for the conduct of [its] business." The money collected for creditors is supposed to placed in a separate trust account.
The banking department declined to elaborate on the circumstances surrounding the misuse of the funds. Accelerated couldn’t be reached for comment Wednesday.
Howard F. Pitkin, the state banking commissioner, said he wants the order to become permanent, which would shut the agency down for good. The agency, however, is entitled to a hearing on the order. No hearing date has been scheduled.
In addition to the order, regulators are seeking civil fines up to $300,000.
From CMA – It is important to make sure your Collection Agency holds any collected money in trust accounts and NEVER mingles it with operating accounts. Agencies that are a member of the Commercial Law League of America must comply by strict trust account standards.
CMA Collection Division is one of those agencies, for more information on how we work click here.