The Texas Attorney General's office on Monday sued Houston-based payday loan collection agency First Integral Recovery, alleging employees claimed the company was tied with law enforcement agencies and the Internal Revenue Service.
Employees referred to the company as "First IRS" to give consumers the impression they were dealing with the federal tax agency, according to the attorney general's office. Employees sometimes told debtors they faced arrest, prosecution and imprisonment because of their delinquent debt.
Employees further claimed to be lawyers or prosecutors, and often falsely told consumers that legal action would be taken on their cases, or threatened "physical harm" if they didn't pay and made harassing calls, according to the lawsuit filed Monday in Texas district court in Travis County.
First Integral officials did not immediately comment, seeking more time to review the specifics of the case. However, O.J. Lawal, an attorney for the business, said the allegations by the attorney general were previously resolved.
First Integral, according to the lawsuit, also tried to collect debts without attempting to verify them, even after consumers said the debts had been paid or discharged in bankruptcy, and had 168 complaints filed against it with the Better Business Bureau in Houston over the past three years. The firm allegedly operated for seven months during 2010 without having proper bonds, including a surety bond with the Texas Secretary of State - a legal requirement for third-party collectors.
The attorney general seeks civil penalties for violations of the Finance Code and Texas Deceptive Trade Practices Act.
