Consumer Law

Debt Collectors Will Pay More Than $1 Million to Settle FTC Charges

By M. Stan Herring

The Federal Trade Commission has posted an article about a recent debt settlement. Credit Bureau Collection Services, a nationwide debt collecting company, has agreed to pay more than $1 million to the FTC as a settlement for violating "federal law by inaccurately reporting credit information and pressing consumers to pay debts they often did not owe."

The FTC's complaint was that the company violated the Fair Debt Collection Practices Act by illegally trying to collect invalid debts and then reported the debts to credit reporting agencies and ignored disputes from consumers. Also, they are charged with violating the Fair Credit Reporting Act.

In addition, even after receiving information from consumers that a debt was paid off or did not belong to the consumer, the company continued to assert, no longer with a reasonable basis, that the consumer owed the debt, without trying to confirm or dispute the consumer?s information, in violation of the FTC Act.

In addition to imposing the $1.1 million civil penalty on the company, the settlement order:

-Bars the defendants from further violations;
-Prohibits them from making unsupported statements to collect a debt or obtain information about a consumer;
-Bars them from making claims that a debt is owed or about the amount, without a reasonable basis;
-Requires the defendants, when a debt is questionable or a consumer questions it, to either close the account and end collection efforts or investigate the dispute. If they cannot show that the consumer owes a debt, they cannot sell the debt or provide it to any business other than the original client; and
-Bars the company from re-reporting information to credit reporting agencies that it had voluntarily deleted from credit reporting before December 2008.

If you have had problems with debt collector harassment or faulty credit reports, feel free to contact us through our website or by calling 205-879-2447.

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Full post as published by Alabama Consumer Blog on March 04, 2010 (boomark / email).