A major debt collection agency that employs 1500 debt collectors who try to collect on some 24 million past due accounts, has agreed to pay a civil penalty of $2.8 million to settle Federal Trade Commission charges that its aggressive collection techniques violated federal law. The FTC alleged that West Asset Management, Inc. violated the FTC Act and Fair Debt Collection Practices Act when collecting debts from consumers.
It would be easy to just dismiss this as an example of a rouge collector gone wild, if not for the fact that the Federal Trade Commission continues to report more complaints about debt collectors than any other single industry.
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Here are some of the ways West Asset Management allegedly violated federal law:
- Calling consumers multiple times each day, often regarding accounts that did not belong to them
- Using abusive or rude language
- Telling third parties about debtor’s debts
- Contacting consumers after receiving written notification instructing them to cease contact
- Withdrawing funds from consumers’ bank accounts or charging their credit cards without consent
- Falsely telling debtors that they would be sued, arrested, or have their property seized if they didn’t pay the debt
- Deceptively claiming that partial payments would settle debts in full, and
- Claiming that negative information would stay on the debtor’s credit reports until debts were paid.
The FTC enforces the federal Fair Debt Collection Practices Act, and maintains information about debt collection complaints, which it compiles into an annual report to Congress. The FTC received 88,190 FDCPA complaints about third-party debt collectors in 2009.
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The $2.8 million civil penalty is the largest civil penalty the FTC has obtained in a debt collection case. While that fine may send a significant message to the industry about the importance of following federal law when collecting debts, it will not help individual debtors harmed by unfair debt collection tactics. Consumers who believe West Asset Management broke the law in attempting to collect debts from them should consider consulting a consumer law attorney. Under the FDCPA they may be entitled to damages as well as attorney fees.
NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. This consent order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent orders have the force of law when signed by the District Court judge.
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