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Connecticut Department of Banking Fines Law Firm $100,000 for Collecting Without a License

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On December 1, the Connecticut Department of Banking issued a cease and desist order to the Law Offices of David M. Katz mandating the law firm cease conducting collection activities in the state without a license. The law firm was also fined $100,000, the maximum allowed by law.

Earlier this year, the Department of Banking issued a temporary order to cease and desist which stated:

  • That the Department of Banking had received a list of 9,788 Connecticut debtor accounts that were referred to the law firm between July 1, 2018 and June 30, 2019. The total balance of the accounts equaled $1,380,996, and total amount collected on the accounts by the law firm was $80,709.62.
  • That the Department of Banking had received a copy of the collection agreement, which described terms and conditions with relation to the accounts placed with the law firm.
  • The law firm’s collection activities consisted of sending letters and contacting Connecticut debtors by telephone, as well as weekly reporting.
  • The conduct required a Connecticut debt collection license, but the law firm failed to have one.

Concurrently, with the issuance of the temporary cease and desist order, the Department of Banking issued a notice of intent to issue a permanent cease and desist order. The law firm had 14 days to respond to the notice and request a hearing. The law firm failed to respond within the prescribed time, resulting in the above-mentioned December 1 cease and desist order.

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