Condor Capital has been hit with a federal lawsuit in Manhattan by New York State’s Department of Financial Services for “bilking millions of dollars from vulnerable low-income borrowers, least able to afford it,” according to Superintendent Benjamin Lawsky.
“We are taking swift action today to stop them from abusing more consumers,” he stated.
Founded in 1996 by Stephen Baron (also named in the suit) Condor Capital specializes in providing loans to people with limited finances, or without sufficient credit history to apply for conventional back loans. However, authorities contend that the company regularly retained accidental overpayments, and immediately closed borrower’s online accounts so they could not see if any refunds were due them. In many cases, authorities stated that customers ended up paying Condor more than they owed after trading in their vehicles, or receiving insurance settlements to cover the cost of cars “totaled” in accidents. “In some instances the car owners wrote too big a check for their final payment,” regulators stated. In addition, Condor has been accused of carelessly handling clients’ personal information after investigators found “sensitive data” lying around common areas at their Hauppague, NY offices.
The Department of Financial Services is now trying to use provisions of the Dodd-Frank financial Reform Act (which empowers states to enforce federal consumer protection laws) to get Condor Capital to repay customers, as well as force it to shut down its business all-together. In the meantime, a federal judge has essentially frozen Condor’s operations by granting a temporary restraining order against the lender.