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FTC – Original Creditor Suit
Finalized 10/8/2004
Complaints about
creditors’ in-house collectors:
The Commission
also received 12,906 complaints in 2003 about creditors that were
collecting their own debts, down from 14,705 in 2002. Because
creditors are not generally covered by the FDCPA, some in-house
collectors use no-holds-barred collection tactics in their
dealings with consumers. While the Commission cannot pursue
such creditors under the FDCPA, it has done so under the Federal
Trade Commission Act in the past, and will continue to do so in
the future as appropriate cases present themselves.
Two Companies Settle Harassment Charges
Relating to Debt Collection
Two
companies whose representatives allegedly
harassed consumers with multiple
phone calls and abusive language have agreed to settle
Federal Trade Commission charges that their business practices
violated federal law. The FTC’s complaint against Applied Card
Systems alleged that, as part of the companies’ debt collection
practices, representatives repeatedly call third parties who had
already told them they did not have any information about the
consumers from whom the companies were trying to collect payments.
According to the FTC, representatives of
Applied Card Systems, Inc., and Applied Card Systems of
Pennsylvania, Inc., call third parties, including relatives,
neighbors, and employers, attempting to get information about
where consumers live or work in order to contact them about a
delinquent debt. The FTC alleges that the representatives have
continued to call these third parties, even after they have told
the representatives that the consumer they are looking for does
not reside or work with them. Many of the third parties requested
that the representatives stop calling them. The FTC charges that,
in many cases, the companies’ representatives harassed the third
parties with repeated phone calls, and abusive, sometimes obscene,
language.
The consent order bars the respondents from:
·
Contacting any third party more than once unless the third party
requests that they do so, or unless they reasonably believe that
the third party gave them incorrect or incomplete information and
now has further information;
·
Harassing third parties with abusive or obscene language or
repeated phone calls;
·
Communicating with a consumer to collect on a delinquent debt: (1)
at a time or place the consumer
has said is inconvenient; (2)
at the consumer’s place of
employment if the consumer has already stated that the employer
prohibits personal phone calls; and (3)
if the consumer is represented by
an attorney with respect to the debt;
·
Falsely representing to consumers the amount or status of a debt
or threatening to take action
against a consumer that they do
not intend to take or that is illegal to take;
·
Collecting any amount other than the amount expressly stated in
the agreement creating the debt; and
·
Applying a consumer’s payment in a way that the consumer has not
directed.
The proposed consent agreement also contains
standard record keeping requirements to assist the FTC in
monitoring the Respondents’ compliance.
The Commission vote authorizing the staff to file the comments was
5-0.
Commission approval of final consent order:
Following a public comment period, the Commission has approved a
final consent order in the matter concerning Applied Card Systems,
Inc., et al. The Commission vote to approve the final consent
order was 5-0. (FTC File No. 032-3040; the staff contact is
Jessica D. Gray, FTC Southeast Region, 404-656-1350; see press
release dated August 25, 2004.) (http://www.ftc.gov/opa/2004/10/fyi0458.htm) |