Bankruptcy

Debt Collector to Pay $1.75 Million

By Nathalie Martin

More Robo-news, this time robo- dialers.  Allied Interstate Inc., a large Minnesota debt collection agency with a history of consumer complaints, has agreed to pay $1.75 million to settle federal allegations that it broke the law by trying to collect debts people didn't owe, according to the Minneapolis Tribune today.  This is the second largest civil penalty the FTC has ever obtained against a debt collection firm. The suit brought, and the resulting settlement, send a message to the collections industry that repeatedly calling consumers who dispute a debt is not tolerated.

What are some other common collection infractions? Speaking to neighbors, co-workers or others about a consumer's debts, threatening legal action the collector does not intend to take, calling the wrong person, calling after being asked by a consumer in writing to stop calling, using foul language, and using "robo dialers," to automatically call the same people multiple times a day. With Allied, such calls continued even after people insisted the firm was calling the wrong person or that they did not owe the debt, the FTC alleged in a federal lawsuit.

Still, according to consumer attorneys, suits against collectors are few and far between and even this fine may not be enough to deter collectors. Quoting from the article above, attorney Peter berry of Minneapolis stated that  the ?fine levied for this relentless abuse of consumers is tiny compared to the profits this agency made over the years engaging in that abuse."

Full post as published by Credit Slips on October 22, 2010 (boomark / email).