State Fines Debt Collector that Appears to be Running Scam

The Minnesota Department of Commerce last month fined a collection agency in absentia for failing to forward collected money to its client.

Back in February, the Department had issued a judgment and recommendation to fine collection agency Brooks, Newman & Stone, Inc. for failing to pay – or even communicate – with a specific client after it had negotiated a $2,000 settlement with a debtor.  The collection agency never responded to any communication from the state and did not show up to defend itself in the hearing.

The Minneapolis Star Tribune reported this weekend that the final fine had been set at $7,500.

The accusations against Brooks, Newman & Stone were fairly straightforward. A dental lab in St. Paul, Minn. received a fax solicitation from the collection agency claiming it was “dental lab collection specialist” with more than $800 million collected in the past year and the ability to collect in all 50 states. The dental lab placed at least one account with Brooks, Newman & Stone. After months of no contact, the lab discovered that the collection agency had received a payment of $2,030 from the debtor to settle the account. But the lab could not reach anyone at the collection agency.

When the Minnesota Department of Commerce began investigating, they discovered that Brooks, Newman & Stone was not licensed as a collector in the state. Furthermore, the company refused to respond to any communication from authorities, including delivery-confirmed certified mail.

An online search of Brooks, Newman & Stone online shows a definitive pattern of non-remittance to clients. One business reputation site has nearly a dozen complaints logged against the firm, all similar to the story told by the dental lab. The company also has a standing “F” rating from the Florida Better Business Bureau, its home state.