DEBT COLLECTORS SETTLE WITH FTC OVER ALLEGED FTCA AND FDCPA VIOLATIONS FOR RECORD AMOUNT

The Federal Trade Commission recently entered into a $2.25 million settlement with a collection agency and its owner for alleged violations of the Federal Trade Commission Act (“FTCA”) and the federal Fair Debt Collection Practices Act (“FDCPA”). The settlement reportedly provides for the largest civil penalty that the FTC has obtained in a debt collection case. The FTC alleged in its complaint that the defendants violated the FTCA and FDCPA when collecting debts by, among other things:

In addition to the monetary settlement, the defendants have agreed to (i) refrain from engaging in illegal collection practices, (ii) clearly and conspicuously disclose to consumers that they may stop the defendant from contacting them about the debt and (iii) notify consumers that they may contact the defendant’s physical address, e-mail address or toll-free phone number if they have a complaint about the way the company is collecting the debt.

DEALING WITH MULTISTATE DEBT COLLECTION COMPLIANCE? We routinely advise on collection-related activities and the regulated activities of creditors, third party debt collectors, debt buyers and loan servicers. We also publish an easy-to-use reference that compiles state and federal laws governing debt collection practices. The Debt Collection Digest is organized topically, includes the federal Fair Debt Collection Practices Act and Commentary for easy cross-reference, and covers ADAD and monitoring and recording statutes. The Digest covers both consumer and commercial collections and includes a detailed analysis of statute applicability, as well as supplemental information such as codes of conduct. Creditors, subsequent holders, third party collectors, debt buyers and loan servicers should find the Digest an invaluable resource for collection program development, management and regulatory compliance. Contact us for details.