Feds ding biggest debt collector for harassment

The largest debt collection agency in the world is penalized $3.2 million for harassing consumers who owed money.

By Mitch Lipka Jul 9, 2013 4:15PM

Image: Concerned couple with paperwork © Thinkstock, Comstock, Getty ImagesWhen consumers who are in debt don't pay, creditors employ companies set up to go after that money. However, unlike the local loan shark, who might employ someone to pummel you or bust a kneecap, debt collection companies have to be a bit more respectful of those who owe.


That is, they're supposed to be.


While they don't have to be genteel, the federal government has a set of rules collectors must play by -- intended to help consumers avoid harassment. But ask any debtor: that often isn't the case.


To that end, the Federal Trade Commission accused the world’s largest debt collector, Expert Global Solutions, of stepping over the line, violating the Fair Debt Collection Act and other laws that govern how debts can be collected.


As a result, the company has agreed to pay a $3.2 million penalty and to stop the illegal harassment alleged by the FTC. The penalty is the largest ever against a third-party debt collection agency, the FTC said.


The company and its subsidiaries (ALW Sourcing, LLC; NCO Financial Systems, Inc.; and Transworld Systems, Inc., which also does business as North Shore Agency, Inc.) were accused of calling people over and over again -- including after being told to stop -- as well as calling early in the morning and late at night, at consumers' workplaces, and leaving messages that included details of the debt. Those practices all violate the established rules of conduct.

To make matters worse still, the FTC alleged the companies engaged in this pursuit even when they weren't sure the debt was owed, including when those they were going after said they did not owe the money.

Once the agreement to settle the case is finalized, when someone in collection "disputes the validity or the amount of the debt, the defendants must either close the account and end collection efforts, or suspend collection until they have conducted a reasonable investigation and verified that their information about the debt is accurate and complete."

To check on whether the companies are complying, they will be required to record a minimum of three-quarters of the debt collection calls they make for a year.

Here is a list of practices that debt collectors are forbidden to use, according to the FTC:
  • Harassment. That includes threats of harm, the use of obscene language or repeatedly calling.
  • Lying. They can't claim to be lawyers or government workers, allege you have committed a crime or send you documents and assert they are legal documents when they aren't.
  • Cheating. They can't collect extra fees beyond what you owe, to threaten to take your property (unless they legally can), or contact you using a postcard.
  • Calling at all hours. A collector can't call before 8 a.m. or after 9 p.m., unless you say they can, and they can't call you at work if they're told you can't receive their calls there.



You can also stop a collector from contacting you. Here's what the FTC says you must do:

Write a letter to the collector (keep a copy) and send it by certified mail and request a return receipt. "Once the collector receives your letter, they may not contact you again, with two exceptions: a collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action, like filing a lawsuit," the FTC said. "Sending such a letter to a debt collector you owe money to does not get rid of the debt, but it should stop the contact."

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114Comments
Jul 9, 2013 5:57PM
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3.2 million isn't enough. EGS can afford that easily. And it won't make them stop their illegal practices.

Also, what about a huge fine for collection agencies who call wrong numbers 12-15 times a day and harass people who aren't associated with the debt and/or debtor and, most often, don't even know who the person is?? And what about the collection agencies not listening to people when they tell the agency it has the wrong number??? Where are the huge fines for that????

Jul 9, 2013 6:52PM
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IT'S ABOUT TIME!!! I worked for Transworld Systems, North Shore Agency.  I quit when I found out they were stealing from my customers.  They told a customer they collected only 20% of the debt and the customer would have to split that with them for collecting it, in fact they collected 100%.  Cheaters, liars and thieves'.    All their managers, that run the sales offices are liars and thieves'. 

They should go to jail. 

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NCO Financial Services has operated under no less than FIVE (5) different names over the course of the last few years...
North Shore Agency has done the same under different names...

Some of these thieves will pick up already paid off debts, and, or paid debt or closed accounts (paid off/closed for years) and try to trap you into payments to accounts that have been LEGALLY paid up/off years before...

Unless these 'junk debt' vultures are PERMANENTLY stopped, these abuses will continue...
The FTC has to strengthen their penalties and laws...
Jul 9, 2013 5:02PM
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The Biggest debt holder and debtor is Our Government.
Jul 9, 2013 5:20PM
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The penalty for the scurrilous bastards who pay pennies on the dollar for charged off debts and then tie up our legal system with frivolous lawsuits was too small.
Jul 9, 2013 6:59PM
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$3.2 mil is chicken feed.  Put some of these slimy bastards in jail where they belong.
Jul 9, 2013 6:39PM
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Thinking of things worse than a debt collector, I could only come up with three...

Murderers, Rapists and Child Molesters

Jul 9, 2013 5:40PM
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Bass & Associates, P.C are associated with HSBC and Best Buy they try to go after people who have been in the unfortunate situation of filing bankruptcy.  They will first try to get a person to re affirm the debt don't unless your attorney tells you that you have to.  They then will send a formal looking letter demanding the return of certain items on the cards after the discharge, there again talk to your attorney about returning the items if the debt was discharged they use intimidation which is not right.  If your attorney says it is a discharged debt and they keep contacting ask them if they know the meaning of bankruptcy and to contact your attorney. 
Jul 9, 2013 5:41PM
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It's about time! Hopefully all of the others are paying attention to this. For fly by night companies that pay pennies on the dollar for old debts, which should be illegal; this should come as quite a shock. NCO is just the tip of the ice burg. There are many others that are far worse. 
Jul 9, 2013 4:45PM
Jul 9, 2013 9:17PM
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debt collectors are like parasite.  they use predatory techniques all of the time and think they are above the law.
Jul 9, 2013 6:50PM
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Thankfully, I have never been on the other end of a collection agency call, but I have worked in that field and know that there are just some lines I was not willing to cross just to collect a debt.  Yes, the debt was owed, but I cannot see making threats as a way to solve anything.  It turned out that I ended up having the "BEST RECORD" in my collections for 2 1/2 years that I worked for this Finance Company because I worked with my customers and treated them with respect.  Yes, I did the loans, but also in turn would go out and do my own collections!  Trust me when I say that most of the areas I went to were not nice neighborhoods either, mostly projects and rundown areas of town, but these were human people who just were down on their luck.  It was not my place to judge their life as they were doing what they could to get ahead.  I can tell you these were very nice people who did their best to pay their bills on time and would do their very best to be sure to pay me back (my company) because I was so nice to them. Yes, I knocked on doors, but I offered partial payments with deferment if they had so many months of paying w/o missing or being delinquent.  By offering incentives, my customers would do their very best to pay us back and everyone was happy! So I had very few loans that ever went into default. 

 

Most customers who have bad credit and have to use a high interest loan finance company are not always aware of what it best to get their credit score back, so that was where I took my banking experience and did my very best with each customer to get them out of debt as much as possible.  To  explain further, say a customer wanted to get a personal loan using their vehicle as collateral for $2500 to pay on their debt-like credit cards-sears, Lowes, MasterCard etc.  I would NEVER do that loan & give them a $2500 check and expect them to pay off the bills, instead I would cut checks DIRECT to the companies they owed-with a letter signed by the customer to CLOSE THE ACCOUNT once paid in full.  This would then allow the customer to not get back into debt and since they had bad credit anyway and more than likely the accounts were in collections and they would not be permitted to use them anyway-you can see the benefit to the customer and it pretty much guaranteed this loan would get paid back.  By paying off those bad debts and repaying the new loan & keeping a good pay history-this allowed the customer(s) to re-build their credit.  I guess you could say I did credit counseling with every customer to find out their situation and then did my loans accordingly.  Very Rarely, did any of my customers just get a check cut to them in their name. I would say 95% of all my loans were to payoff bad debt/existing debt-close the accounts and rebuild credit-which is what they needed.

 

So with all that being said, I would NEVER have threatened or harassed one of my customers!  That's just crossing the line and I am glad to see that this company is being punished!!! 

Jul 9, 2013 6:35PM
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I hope this sends a message to all parasitic operators who operate in the grey areal of the law.  
Jul 9, 2013 8:57PM
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This really is not about debt collection.......it is about the pattern of harassment that our wonderful FTC refuses to prosecute.  These are the same racketeering practices that telemarketers, scam artists, supposed charities, political action committees, and just plain out and out criminals perpetrate against the American people. 

 

So far the best tool I have developed is to have all my calls go to voicemail after two rings.  This gives me enough time to read the caller  ID and determine whether I want to accept the call.  I also have my service through Vonage which has a feature to turn off incoming calls during specified times......like 10:00pm to 7:00am.

 

My friends and neighbors are aware of my practices and often just send me an e-mail to call them.  It does take a bit of effort purging my VM but it is pretty much that if I don't recognize the number, I delete it without listening.

 

I think if I ever have the opportunity to meet Heather or Rachael from Credit Card Services, I will strangle both of these women simply because of the sound of their voices.

Jul 9, 2013 7:54PM
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Some of you smug pompous a$$holes have no idea what it's like to lose your job and your home.
I really hope you never do, but be advised...
Karma is a bitch !!!

Jul 9, 2013 7:41PM
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These freakin creditors are about as greedy as you can get. They loan money to borrowers when they know there is a strong chance the borrower will default,  then aggressively harass these people when they don't pay.  What's even worse is that  they turn right around and lend more money to these very same borrowers. Creditors should be forced to eat the loss without any harassment! Maybe then they'll be more careful regarding who they extend credit to.
Jul 9, 2013 11:54PM
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Worse still are the collection attorneys that sue hoping to obtain default judgments. Failing that they will lie in open court and pursue all manner of illegal activities in court in order to get a judgment so that property can be seized. r.u..bin and r.othman are known for  this.Complicit small town judges are their agents. What can be done about these lawyer abuses in court? This is very serious and perverts our justice system. Lawyers are supposed to be agents of the court. But they lie in court and steal property.

Jul 9, 2013 9:02PM
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big deal they pay a fine and expand their illegal actions to rake in more money to offset the loss. better yet make the owners and managers pay the fines out of there pocket and shut the companies down. I used to work for them so I know how the work. I quit because good conscience would not allow me to take advantage of people having a tough time. In fact in my case most of the debts were  because medicaid never processed the payments leaving the individual to deal with it themselves.
Jul 9, 2013 7:09PM
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I DON'T CARE IF IT'S THE ONLY JOB A PERSON COULD GET!! I HAVE NO RESPECT FOR PEOPLE WHO ARE WILLING TO TREAT PEOPLE LIKE THEY WERE SCUM BECAUSE THEY ARE HAVING MONEY PROBLEMS!! ESPECIALLY PEOPLE WHO HAVE MEDICAL BILLS!! NO ONE HAS CONTROLL OF GETTING OR NOT GETTING SICK!! IT'S NOT LIKE BUYING A CAR OR TV THAT YOU CAN'T AFFORD BUT BOUGHT IT ANYWAY!! PEOPLE WITH MEDICAL BILLS SHOULDN'T HAVE TO PUT UP WITH A$$HOLES FROM A COLLECTION AGENCY!! THIS WAS BROUGHT TO THAT IDIOT BUSH'S ATTENTION ! HE SAID PEOPLE SHOULD BE RESPONSIBLE FOR THEIR BILLS!! IT'S EASY FOR HIM TO SAY,HE WAS BORN INTO MONEY!! HE DOESN'T KNOW WHAT IT'S LIKE TO NOT HAVE MONEY!! WHEN HE AND EVIL CHANEY DIE, THE WORLD WILL REJOICE!!
Jul 9, 2013 5:20PM
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If they agreed to pay the fine, they probably already $100 million.

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