Collection agencies are required to abide by federal debt collection laws. However, collection agencies also assume that most consumers are not aware of collection laws or that consumers will take the initiative to report creditor harassment. After a collection agency has been ordered to pay millions for violating collection laws, debt collectors may now consider paying close attention to compliance guidelines.
West Asset Management Inc., one of the largest debt collection firms in the country, has agreed to pay a $2.8 million civil penalty to the Federal Trade Commission for allegedly breaching federal debt collection laws. The FTC said that the settlement was the largest penalty ever paid to the FTC by a debt collection agency.
According to the FTC, West Asset Management was aggressive with consumers, using deceptive tactics when attempting to collect debts. Thousands of consumer complaints were filed claiming that the agency called several times a days at all hours of the day, collectors were rude while speaking with consumers and used abusive language, employees tried to withdraw funds from accounts without the consumers’ consent and also attempted to charge consumers’ credit cards in order to collect debts.
In addition to paying the $2.8 million penalty, West Asset Management employees will be prohibited from pretending to represent a law firm when contacting consumers. The company cannot threaten any legal actions or make other threats that are not intended to be carried out. The collections agency also cannot try to take funds from consumers’ accounts without permission or send account information to third parties.
Bankruptcy attorneys in Miami believe that every consumer should understand their rights and that creditor harassment is illegal. Companies could be penalized with millions in fines if they violate federal collection laws. Florida consumers concerned about collection calls can seek legal guidance from a bankruptcy attorney. In some cases, filing bankruptcy can help resolve debt issues and eliminate harassing calls from collection agencies.
Omaha World-Herald: “West unit to pay $2.8 million fee,” Ross Boettcher, 17 Mar. 2011