West Asset Management Inc., the debt collection unit of West Corp., has agreed to pay $2.8 million to settle charges it used aggressive collection methods that violated federal law, according to the Federal Trade Commission. The civil penalty is the largest obtained by the FTC in a collection case.
The FTC alleged that the company violated both the FTC Act and Fair Debt Collection Practices Act.
According to the FTC’s complaint, thousands of consumer complaints have been filed against West Asset Management, which employs 1,500 collectors in 13 states and one offshore location. West Asset Management collectors allegedly called consumers multiple times each day, often regarding accounts that did not belong to them and sometimes using rude and abusive language.
The FTC also charged that West Asset Management illegally disclosed the existence of consumers’ debts to third parties and ignored consumers’ written requests for the company to stop calling.
The company also allegedly withdrew funds from consumers’ bank accounts or charged their credit cards without consent and falsely claimed that consumers would be sued, arrested or have their property seized for nonpayment of their debt. Finally, the FTC alleged that West Asset Management falsely claimed that partial payments would be accepted as full settlement on accounts and that negative information would stay on consumers’ credit reports until debts were paid.
According to the complaint, West Asset Management has collected on more than 24 million accounts on behalf of clients in the healthcare, telecommunications, consumer credit and government service industries.
Officials at West Corp. were not immediately available for comment on the settlement. The order permanently prohibits the company from using false, deceptive or unfair debt collection tactics, including:
* Misrepresenting itself as a law firm or that its collectors are attorneys;
* Misrepresenting that debtors will be arrested or have their property seized if they don’t pay;
* Threatening actions that would be illegal, or actions that the company has no intention of taking;
* Making false statements to collect a debt or obtain information about a consumer;
* Withdrawing funds from consumers’ bank accounts or charging their credit cards without their consent;
* Depositing postdated checks before the date on the check, or threatening to do so;
* Revealing to third parties that a consumer owes a debt;
* Asking a third party for a consumer’s location information more than once without the third party’s consent or a reasonable belief that the person’s earlier response was wrong or incomplete and that the person now has correct location information;
* Calling consumers before 8 a.m. or after 9 p.m., or at their workplace;
* Communicating with a consumer after receiving written notice that the consumer refuses to pay or wants the collector to stop calling; and
* Using obscene or profane language, or harassing consumers with repeated phone calls.
