The Connecticut Banking Commissioner (Commissioner), acting through the Consumer Credit Division of the Department of Banking (the Division), conducted an investigation into the Law Offices of David M. Katz, discovering that in 2018 and 2019 the firm had engaged in in unlicensed collection activity involving about 10,000 Connecticut accounts with a total balance of $1.4 million. The firm allegedly collected about $81,000 of that amount.
As a result of the investigation, the Commissioner issued a temporary order to cease and desist, a notice of intent to issue order to cease and desist, a notice of intent to impose a civil penalty, and a notice of a right to a hearing. The Commissioner alleged in the order that the firm had acted as a consumer collection agency in Connecticut without a consumer collection agency license, in violation of § 36a-801(a) of the Connecticut General Statutes. The firm had 14 days to request a hearing, but failed to do so. The Commissioner then entered a final cease and desist order imposing a civil penalty of $100,000.
The named attorney for the firm then contacted the Division requesting that the Commissioner reconsider its final order and informing the Division that, due to extraordinary circumstances, the law office was no longer in business. The parties entered into a consent order vacating the final order and reducing the fine to $20,000. In entering the consent order, the firm represented that it had ceased all collection activity in Connecticut after receiving a letter from the Division in December 2019. The firm also represented that the alleged violations would not occur again in the future.
A copy of the consent order is available here.