Debt Settlement company sued by FTC for $1.75 Million

Debt collection companies are not above the law

The company Allied one of the largest debt collectors in the nation will pay $1.75 million to the FTC for making multiple phone calls to the wrong person and to collect the wrong amount. This is the second largest civil penalty obtained by the FTC from a debt collector.

This goes to show you that no one is above and beyond the Fair Debt Collection Practices Act or Federal Trade Commission Act. Which both were violated in this law suit. David Vladeck, the director of the FTC’s Bureau of Consumer Protection stated today that debt collectors had better make sure their information is correct, or they might end up paying big fines. He stated that there is no excuse for trying to collect a debt from someone if you can’t verify they actually owe the debt.

According the FTC, Allied continued collection efforts, between 2006 & 2008, even after the consumer told the company they did not owe the debt. They proceeded with this process without verifying the accuracy of the disputed information. The company was accused of making improper harassing phone calls to the consumers, using abusive language, calling multiple times a day, and sometimes hanging up when the calls were answered. The company also allegedly made calls to third parties without the consumers consent or court permission, and threatened court action that it did not attend to take.

The FTC sets some rules for Allied. The decree states the following.

(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 implausible, facially unreliable, or missing essential information. With either circumstance the debt collector must either close the account and stop collection efforts or suspend collection until they have conducted a reasonable investigation and verified that the information about the debt is correct and complete. If allied cannot produce this information the company cannot sell the debt to any other business other than from the client that which the debt was obtained.

The consent decree also bars Allied from:

- Violating the Fair Debt Collection Act

- Communicating with third parties about a consumers debt without the consumers permission or court consent

- Using obscene or profane language or harassing consumers with repeated phone calls

- Making claims that a debt is owed or about the amount without reasonable basis

- Asking third party for a consumer’s location more than once without that third party’s consent or a reasonable belief that the persons earlier response was incomplete or wrong and that that person has the correct location information.

- Making false statements to collect a debt or obtain information about a consumer

- Making any other false or misleading statement in collecting a debt, including threatening action it does not intend to take

- Making fales statements to collect a debt or obtain information about a consumer


Author: Mike Clover

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