A national debt collection service with operations in Phoenix has been censured by the Federal Trade Commission for aggressive, invasive and misleading practices. They agreed to settle the case against them for a one million dollar civil penalty, although they have admitted no wrongdoing for engaging in unethical practices such as fraudulent text messaging and deceptively threatening to have debtors arrested.
While in the pursuit of debt the collection agency engaged in a number of unscrupulous practices. For example, they mailed people collection letters with large graphics on the cover depicting Uncle Sam grabbing a person and shaking him until money fell out of his pockets. This is not only tasteless, it is illegal. No collection agency may indicate on the outside of mail that the recipient is in debt. Similarly, it is illegal and improper for a collector to contact the friends or family of a debtor, yet these agencies routinely harassed loved ones, coworkers and distant acquaintances.
The attorney who represented the company stated that he believed there was no intentional pattern of wrongdoing. This is in sharp contrast with the report from the Justice Department, which claimed that the companies engaged in “deceptive and unfair practices” when dealing with consumers. From misrepresenting themselves as attorneys, to threatening debtors with garnishment of their wages to sending deceptive text messages to third parties unconnected with the debt, the Justice Department report describes a consistent pattern of fraud and abuse.
Bankruptcy is a difficult time for anyone, and the law recognizes that. By offering basic protections to debtors, our country shelters them with reasonable protections so that they can get back on their feet and repay their debts. It can be helpful to seek the advice of a lawyer if someone was the victim of a collections agency’s illegal tactics for collecting debt.
Source: Huffington Post, “Debt Collectors Using Terrible New Tactic Get Fined $1 Million“, Chris Kirkham, September 25, 2013