Ohio Collection Agency Settles Second Lawsuit

National Enterprise Systems (NES) Inc., a collection agency in Solon, Ohio, will pay $75,000 to settle illegal and abusive collection charges brought in a lawsuit by West Virginia's Attorney General's office.

The money will be used to reimburse students and consumers who paid the illegal fees to NES, Attorney General Darrell McGraw announced today. The company had attempted to collect debts owed to colleges and universities.

The state's Consumer Protection Division sued NES in July 2009, see story, alleging the agency harassed consumers on the phone and made false threats about lawsuits, arrest and criminal prosecution.

Ohio Attorney General Richard Cordray's office sued NES at the same time. In April, NES settled that lawsuit, see story, and agreed to pay an estimated $400,000, including $207,500 in consumer restitution with a comparable amount going to Ohio's Consumer Protection Enforcement Fund. The The Ohio suit charged NES with violating Ohio’s Consumer Sales Practices Act and the Fair Debt Collection Practices Act.

Some of the practices alleged included calling and harassing consumers’ coworkers and family members, using abusive language, trying to collect debts consumers did not owe and making unauthorized withdrawals from consumers’ bank accounts, according to Cordray's office, which logged more than 390 complaints against NES.

NES officials did not respond to a request for comment.