A federal court recently entered a final order against a Florida debt collection agency that used misleading dunning letters and abusive telephone calls to falsely suggest that consumers would be sued, their property seized and their wages garnished if they did not pay what the company said they owed. The collectors were accused of shouting and using abusive language.
Florida Debt Collector Hit With 3.4 Million Dollar Fine by FTC Court Enters Final Order in FTC Action Against Florida Debt Collectors
A federal court has entered a final order against a Florida debt collection agency, its principals, and its attorney, settling a Federal Trade Commission action that alleged that the defendants violated the FTC Act and the Fair Debt Collection Practices Act (FDCPA) while collecting consumers’ debts.
The FTC’s complaint alleged that
the enterprise used misleading dunning letters and abusive telephone calls to falsely threaten that consumers would be sued, their property seized, and their wages garnished if they did not pay the money that the defendants said they owed. The complaint alleged that the collectors often shouted and used profanity and other abusive language to carry out their collections.The stipulated final order, among other things, permanently bars the defendants from falsely representing the character, amount, or legal status of a consumer’s debt, that their collector is an attorney or represents an attorney, or that if the consumer does not pay, the defendants can or will file a lawsuit against the consumer. It also prohibits them from violating the FDCPA in any way, including by disclosing a consumer’s debts to any third parties, using profanity or other abusive language in collection calls, or by continuing to attempt to collect a debt before providing verification of the debt to consumers who properly request such verification. The settlement also requires the defendants to provide consumers with a toll-free number and mailing address to file complaints, promptly investigate each such complaint, and take steps to cease, resolve, and cure any violations of the court order or the FDCPA.
Federal TimesIRS rehires controversial private debt collectors The IRS announced Monday that it will renew contracts for two controversial private debt collectors.
The contracts were awarded to Pioneer Credit Recovery and CBE Group; both companies started doing collection work in 2006. The IRS was long prohibited from using private companies to collect unpaid taxes. But the 2004 American Jobs Act allowed the agency to hire outside contractors.
The private collectors have been criticized by privacy advocates — who worry about the disclosure of sensitive tax information — and unions, who see contractors as taking away an inherently governmental function.
And the companies have struggled to prove their worth financially. The IRS estimated private collectors would bring in $65 million in revenues in 2007. They earned just $31 million. The IRS only received two-thirds of that money; the rest paid commissions for the debt collectors.
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