AMHERST, N.Y. (WIVB) — Attorney General Letitia James is shutting down an Amherst debt collection business that the AG accused of using false and deceptive tactics to squeeze consumers.

The attorney general described the operation in Amherst as an illegal debt collection scheme because it involved three companies, all owned by the same businessman who has been in her agency’s crosshairs for at least two years.

The three businesses, most notably Northwood Management Group, LLP operated from a building in the College Park office complex. The owner of the three businesses, Andrew Fanelli, signed off on what is known as an Assurance of Discontinuance, agreeing to shut the three companies down and pay more than a million dollars in penalties.

“Things like telling someone they could go to jail over an unpaid debt, or have their license suspended over a payday loan. That is just not true, we don’t have debtors prisons anymore,” said Christopher Boyd, assistant attorney general.

Assistant Attorney General Christopher Boyd ran lead in the Northwood Management investigation which got picked up their radar screen two years ago. Owner Andrew Fanelli was collecting debts for a collection kingpin, Douglas MacKinnon, when Attorney General Letitia James shut the MacKinnon operation down in 2019.

Christopher Boyd told us, the Northwood Management concentrated mostly on high-interest debt, such as payday loans, even loans that have been charged off.

“So this is older debt, high-interest debt that is bought very cheaply from the original creditor, so pennies on the dollar,” added Boyd.

But Andrew Fanelli’s attorney Eric Soehnlein issued a brief statement telling us in part, the settlement does not include any finding or admission of wrongdoing and provides financially advantageous terms. That Fanelli had intended to get out of the business even before the settlement.

“When the Attorney General began its investigation, Mr. Fanelli already contemplated his exit from the collection industry.  Upon learning of the investigation, he made a practical-minded business decision and chose to resolve the case to focus on other business endeavors.   

Notably, the settlement does not include any finding or admission of wrongdoing on behalf of Mr. Fanelli, it provides financially advantageous terms, and it explicitly allows him to remain in the collection industry for six months to wind down his businesses.  He looks forward to new ventures in the near future.”

Eric M. Soehnlein, partner, Lippes Mathias LLP Attorneys at Law

But Boyd said those false threats have had a real impact on people’s lives.

“They are struggling to pay rent, put food on the table, and to come in with a false threat that you are going to be arrested unless you pay back one of these old high-interest debts, it really is just unconscionable,” Boyd said.

The Attorney General enforces a number of state and federal laws that protect consumers from deceptive debt collectors. For more information, click here.

Al Vaughters is an award-winning investigative reporter who has been part of the News 4 team since 1994. See more of his work here. To submit a Call 4 Action, click here.

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