CT regulator fines parking enforcer $30K for unlicensed collections in New Haven

A Colorado company that polices private parking lots is now paying for its own violation of state law. The penalty stems from two shopping trips in June 2023, when a woman parked in a New Haven lot and left without paying fees of $6 and $12. Parking Revenue Recovery Service Inc. issued citations demanding $89.50 for each visit. Because the car was registered to her father, the bills arrived in his name. He complained to the state Department of Banking in August 2023. Three years later, the company owes Connecticut $30,000. Banking Commissioner Jorge L. Perez ruled Aug. 28 that Parking Revenue Recovery had been operating as an unlicensed consumer collection agency and charging collection fees far above the state’s legal ceiling. Along with the civil penalty, Perez ordered the company to stop collecting in Connecticut without a license and to refund state consumers, with interest, any money it took through similar practices. Connecticut requires anyone collecting consumer debts on behalf of someone else to hold a consumer collection agency license. Parking Revenue Recovery has never held one. State law also caps a collection agency’s fee for its own costs at 15% of what it actually collects, which would have allowed 90 cents on the $6 debt and $1.80 on the $12 debt. The company had signed an agreement in June 2023 with the owner of the lot at 85 Whitney Ave., giving it exclusive authority to enforce parking rules. It installed cameras, monitored vehicles and mailed notices to registered owners when it flagged a violation. The lot owner received 40% of adjusted gross revenue from those fees, plus $7.50 for every violation paid. Parking Revenue Recovery argued it wasn’t collecting debt on behalf of the parking lot owner. The violation fees were its own charges, it said, created by a contract drivers accept by parking beneath the lot’s posted signs. The Department of Banking rejected that argument. It cited a 2016 ruling by the 7th U.S. Circuit Court of Appeals involving the same company, Franklin v. Parking Revenue Recovery Services, which found that unpaid parking fees and the penalties attached to them can be debts under federal collection law. The company fought the case, taking it to a hearing where CEO Michael Drow was called as a witness. The department initially asked for a $200,000 penalty. Restitution is due 30 days from the order’s mailing date.