debt collector hit with record penalty for abusive calls

[novabob]

WASHINGTON, July 9 (Reuters) - Expert Global Solutions, the world's largest debt collection agency, has agreed to pay a $3.2 million civil penalty and stop harassing and abusing debtors by engaging in practices such as calling them multiple times a day, the U.S. Federal Trade Commission said on Tuesday.

The financial penalty levied on the company is the biggest ever obtained by the FTC against a third-party debt collector, the agency said.

On its website, Expert Global Solutions says it is a holding company for a leading accounts receivable management company. Three subsidiaries were also involved in the settlement: NCO Financial Systems, Inc., ALW Sourcing, LLC, and Transworld Systems Inc.

Company employees would continue to call people even after being told that they had reached the wrong person, that the consumer being contacted did not owe the debt or that the debtor did not live in that home, according to a complaint filed on Monday in federal court in Texas.

"They called after being asked to stop; after they promised to stop; early in the morning; late at night; at people's workplaces - when they knew the employers prohibited the calls," Colleen Tressler, a consumer education specialist with the FTC, wrote in a blog post.

Expert Global Solutions did not respond to a request for comment made through its website.

A spokesman for one of the subsidiaries, NCO Financial Systems, said it had made changes to address problems identified by the FTC.

"We ... have worked hard over the past several years to help ensure compliance and fair treatment of consumers on all of our points of contact," Tom Hoy, an NCO senior vice president, said in an emailed statement.

In addition to paying $3.2 million, Expert Global must end abusive practices and suspend or end collection efforts if a debtor disputes what is owed. It can resume collection efforts after establishing that the debt is accurate, the FTC said.

The company must also record at least 75 percent of all collection calls and keep them for 90 days, the agency said.

According to the FTC, the Texas-based company and its subsidiaries have more than 32,000 employees and logged revenues of more than $1.2 billion in 2011.

The companies operate in Canada, Barbados, India, the Philippines and Panama as well as the United States.

 

http://www.cnbc.com/id/100874188?__source=xfinity|mod&par=xfinity

 

[Torden]

I would bet that if you figure it as a percentage of the level of business they do, it's not anywhere near a record.  It's just a minor cost of doing business.  There needs to be $100,000,000.00 or greater penalty or jail time for executives to be something to discourage them.  But the order does include "don't do it again" so it might be possible to hit them harder when they do (and they will).

 

Noting that this is a big umbrella company, I would like to suggest anyone who needs to send a RTP/CC letter to any of them, send it ALSO to the parent company.  Then if subsidiaries sell between themselves after an RTP/CC and resume trying to collect, sue the parent for the violation.

[admin]

I would bet that if you figure it as a percentage of the level of business they do, it's not anywhere near a record.  It's just a minor cost of doing business.  There needs to be $100,000,000.00 or greater penalty or jail time for executives to be something to discourage them.  But the order does include "don't do it again" so it might be possible to hit them harder when they do (and they will).

 

I agree.  On revenues of 1 billion dollars, this fine seems like a mere pittance.  

[nascar]

I agree.  On revenues of 1 billion dollars, this fine seems like a mere pittance.  

 @admin

 

You're absolutely right. It's viewed as the cost of doing business. 

[nascar]

In addition to paying $3.2 million, Expert Global must end abusive practices and suspend or end collection efforts if a debtor disputes what is owed. It can resume collection efforts after establishing that the debt is accurate, the FTC said.

 

oooohhhh, now that's what I call punishment - instructing a debt collector to comply with federal law. 

[finaldebt]

Can they write off the penalty as bad debt and sell it to another collection agency for pennies?

[CordusAdmin]

I agree - the fine is just a drop in the bucket for this huge company.  But, at least they slapped them with a lot of restrictions - now - let's see if they really adhere to these new "business practices"!