Out-of-state debt collector to pay $15K in penalties in Florence price-gouging lawsuit

Out-of-state debt collector to pay $15K in penalties in Florence price-gouging lawsuit
Duke Energy employees work on removing trees and restoring power to a road closed in Wilmington, N.C., after Hurricane Florence traveled through the area Sunday, Sept. 16, 2018. (AP Photo/Chuck Burton) (Source: Chuck Burton)

NEW HANOVER COUNTY, NC (WECT) - State Attorney General Josh Stein has announced a $15,000 settlement against an out-of-state debt collection agency that illegally tried to collect money from Castle Hayne homeowners who were part of a Hurricane Florence-related price gouging lawsuit.

In October, Stein’s office filed a lawsuit against two Ohio men, operating as Scotts Tree Service, alleging that the men charged the homeowners $14,500 for tree removal services that the they did not agree to. A judge granted an injunction in December that barred the company from operating in North Carolina.

After the homeowners refused to pay the $14,500 bill, Scotts Tree Service sent the notice to Massachusetts-based Goldberg & Donovan Inc. for collection. The company and its owners, Stephen and Amy Lombardi, did not have a permit to collect debts in North Carolina, according to Stein.

The owners allegedly engaged in prohibited debt collection tactics that violated North Carolina’s Collection Agency Act, including pretending to be an attorney, harassing the homeowners, and making threats.

Last week, a superior court judge ordered the owners to pay the state $38,000 in civil penalties, however, $25,000 of which will be suspended if the company abides by the consent order. They’re also required to pay $2,000 to the attorney general’s office for attorney fees, investigative costs, and consumer protection restitution purposes.

“This out-of-state debt collector was not permitted to operate in our state, but still tried to take advantage of North Carolinians,” said Stein. “My office will not abide price gougers or their conspirators who break laws designed to protect North Carolina consumers.”

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