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AG Curtis Hill sues Indiana debt collection agency that operated deceptively and without a license

September 30, 2020
By

Attorney General Hill behind podiumIndiana Attorney General Curtis Hill has filed a civil complaint against an Indiana debt collection agency and its owner, alleging they engaged in deceptive and abusive debt collection practices and acted as a debt collection agency without a license from the state.

Nelson Macwan created Munster, Indiana-based New Britain Financial in 2015, and the Indiana Secretary of State (SOS) renewed its license each year, with some gaps, through 2018. However, after learning of Macwan’s previous debt collection practices in Illinois, the SOS declined to renew New Britain Financial’s debt collection agency license in Indiana for 2019. 

The SOS cited Macwan’s lack of “good moral character” in its denial, which came after the SOS learned that Macwan had been enjoined from operating as a debt collector in Illinois because of abusive debt collection practices and that Macwan served jail time for violating that injunction in 2017.

Despite being denied an Indiana debt collection agency license for 2019, New Britain Financial continued to operate in Indiana, the complaint alleges.

Operating a debt collection agency without a license in Indiana constitutes a violation of the Indiana Deceptive Consumer Sales Act, the complaint says. The manner in which New Britain Financial has conducted its debt collection – including threatening consumers with lawsuits, with arrest, with garnishments and liens without having judgments against them – also constitutes a violation of the law, according to the complaint.

“Debt collection is a serious business that can have life-changing impacts on consumers’ lives, and it should be carried out only by individuals who bring integrity to the job,” Attorney General Hill said. “The allegations against New Britain Financial and its owner are serious, and we aim to permanently prevent them from performing these duties in our state.”  

The Office of the Attorney General’s investigation into Macwan and New Britain Financial is part of a nationwide sweep known as “Operation Corrupt Collector.” In addition to the Office’s action against Macwan and New Britain Financial, Operation Corrupt Collector includes enforcement actions brought by 15 other states, as well as the Federal Trade Commission (FTC), the U.S. Department of Justice, the Consumer Financial Protection Bureau and the U.S. Postal Inspection Service.

“For many years, we’ve been working with our law enforcement partners to crack down on illegal and abusive debt collectors,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “At a time when many are under financial stress, our coordinated actions today show that we’re continuing the fight against collectors who threaten people and try to collect debts they don’t owe.”

Macwan also ran a debt collection agency in Illinois, named P.N. Financial, from at least 2006 until 2015. The Illinois Attorney General filed a lawsuit against P.N. Financial in 2012, alleging that Macwan threatened to sue consumers without the authority to do so, threatened to garnish consumers’ wages without the authority to do so and more. 

Macwan was eventually enjoined from “owning, operating, controlling, supervising, managing, or running the operations of any collection agency in or from the State of Illinois.” But rather than ceasing operations, he created New Britain Financial, which he ran, at least in part, from Illinois, according to the complaint.

In June 2017, Macwan pleaded guilty to indirect criminal contempt for violating the Illinois injunction. He was sentenced to five months in Cook County Jail and three years of probation after his release. He continued his debt collection activity after his release, the complaint says.

New Britain Financial filed Articles of Dissolution with the Indiana Secretary of State on or about Oct. 21, 2019.

Attorney General Hill seeks a permanent injunction against Macwan and New Britain Financial that would enjoin them from engaging in debt collection in or from Indiana. Attorney General Hill also seeks restitution for consumers who have been impacted by their alleged practices and other relief.