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$3.2 Million Debt Collector Harassment Penalty Largest So Far

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Washington, DCThe quest against debt collector harassment scored a major victory with a $3.2 million civil penalty levied against a formidable debt collection agency by the Federal Trade Commission (FTC). According to The Washington Post (7/10/13), it’s the largest penalty ever obtained from a debt collector.

The case is the latest salvo in the FTC’s mission to send a message to debt collection agencies that bill collector harassment will not be tolerated.

According to The Washington Post, the agency that served as the most recent target of the FTC is Expert Global Solutions (EGS) and its various subsidiaries. Combined, EGS bills itself as the largest debt collection agency on the planet.

But that didn’t stop the FTC from going after them for alleged debt collector harassment.

According to The Washington Post report, EGS was found by the FTC to have placed calls to consumers at their homes or at their jobs, multiple times a day. The calls allegedly kept coming even after being asked to stop or that such calls to an individual’s place of employment were forbidden.

Under terms of the settlement, EGS is required to properly investigate and verify the accuracy of the debt and the information it has the first time a consumer disputes the amount of debt, or the very debt itself. That, or immediately close the account.

The foregoing, according to The Washington Post report, is an important condition in the FTC’s mandate to protect consumers and mitigate debt collector harassment. That’s because debt is often bought and sold several times over amongst various collection agencies. In so doing, once-accurate information can be watered down or misplaced entirely.

As the account goes through the debt collection market and continues to be flipped to different agencies, documentation becomes limited. At the end of a cycle, there can be little left beyond a debtor’s name, last known address, a Social Security number and the debt amount.

People move, and may have changed their phone numbers. Thus it is not beyond the realm of possibility that consumers receive harassing calls from debt collectors, for debts they do not owe. As debt accounts percolate through the market, collection agencies more often than not fail to verify information, and are rarely willing to invest the time to investigate the validity and accuracy of the debt being pursued.

The settlement to which EGS agreed requires them to do just that at the first sign of a balk by the consumer at the other end of the line. That, or close the account and walk away.

Some harassed consumers have had to resort to a debt collector lawsuit in an effort to get debt collectors off their backs. But the FTC is also fighting for the consumer, managing to eke out more than $50 million in penalties from debt collectors stooping to debt collector harassment. Such practices by the industry have included calls to third parties, such as a debtor’s relatives, neighbors, co-workers or even an employer. The goal, presumably, is to shame the debtor into paying up.

However, such tactics are illegal. Sharing a person’s information with a third party is not allowed except under very limited circumstances. It is unclear if EGS actually practiced any of the foregoing unsavory practices.

But they did agree to the $3.2 million civil penalty, and conditions mandated by the FTC without admitting any wrongdoing. Under the agreement, EGS and its subsidiaries are prohibited from leaving voice mails revealing the alleged debtor’s name or that a debt may be owed. EGS must also record at least 75 percent of its debt-collection calls beginning one year after the date of the order, and retain the recordings for no fewer than 90 days.

In a prepared statement following the settlement agreement, EGS said, “We are pleased to have resolved this matter with the Federal Trade Commission and to have this legacy issue, dating back to 2008, behind us. We cooperated fully with the FTC’s 2010 investigation and have already implemented systems and procedures to help address their areas of concern.”

The settlement agreement has yet to be approved in court. EGS neither admitted nor denied the allegations. The FTC hopes that such a sizeable penalty will help to curb other abuses and examples of bill collector harassment. Failing that, consumers who feel they are being harassed needlessly may do well to consider a bill collector lawsuit.

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