One of the nation’s largest debt collectors, Allied Interstate, was charged by the Federal Trade Commission for making repeated collection calls to collect from the wrong person, to collect the wrong amount or both. Allied has agreed to pay $1.75 million in the settlement, which is the second largest civil penalty obtained by the FTC in a debt collection case.
Allied Interstate, Inc. is a Minnesota corporation that works out of offices in the United States, Canada, India and the Philippines. According to the complaint, Allied used the following debt collection methods against consumers between 2006 and 2008:
- improper harassing phone calls to consumers
- used abusive language
- continued collection efforts even after consumers told the company they did not owe the debt, without verifying the accuracy of the disputed information
- calling many times a day for weeks or months, sometimes hanging up when the calls were answered
- made repeat calls to third parties seeking to locate a consumer, revealed alleged debts to third parties without the consumers’ consent or court permission
- threatened legal action against consumers it did not intend to take
The complaint alleges that these practices violated the Fair Debt Collection Practices Act and Section 5 of the Federal Trade Commission Act.
In addition to the monetary penalty, the proposed consent decree requires Allied to take specific steps whenever (1) a consumer disputes that he or she owes the debt or the amount of the debt, or (2) a reasonable person would consider the information on which Allied is relying to collect the debt to be implausible, factually unreliable, or missing essential information. If any of those circumstances are the case, Allied must either close the account and end collection efforts or suspend collection until it has conducted a reasonable investigation and verified that its information about the debt is accurate and complete. If Allied cannot substantiate that the consumer owes the debt, the company cannot sell the debt or provide it to any business other than the client from which it obtained the debt.
The consent decree also bars Allied from:
- Making false statements to collect a debt or obtain information about a consumer
- Making claims that a debt is owed or about the amount without a reasonable basis
- Asking a third party for a consumer’s location information more than once without that third party’s consent or a reasonable belief that the person’s earlier response was wrong or incomplete and that the person now has correct location information
- Communicating with third parties about a consumer’s debt without the consumer’s consent or court permission
- Using obscene or profane language or harassing consumers with repeated phone calls
- Making any other false or misleading statement in collecting a debt, including threatening action it does not intend to take
- Violating the Fair Debt Collection Practices Act
You can read more about the settlement over on the FTC website: Debt Collector Will Pay $1.75 Million to Settle FTC Charges
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