First FDCPA Enforcement Action Specifically Protecting Spanish-Language Consumers
Houston, Texas-based United Recovery Systems, Inc. (URS) has agreed to pay a $240,000 civil penalty as part of a settlement with the Federal Trade Commission to resolve allegations that the company violated the Fair Debt Collection Practices Act (FDCPA). This is the FTC's first enforcement action against a debt collection company for allegedly violating the rights of Spanish-speaking consumers.
According to the FTC's complaint, on numerous occasions, in connection with the collection of debts in both English and Spanish, the company's debt collectors communicated with consumers at improper times or places, engaged in prohibited communications with third parties, harassed and abused consumers, and used deceptive practices to collect consumer accounts. In addition to the civil penalty, the proposed consent decree to settle the FTC charges includes broad prohibitions on future FDCPA violations and would require URS to inform consumers in writing that they may stop the company from contacting them about the debt and may contact a special URS phone number or address should they have a complaint about the way URS is collecting the debt. The settlement also includes a comprehensive consumer complaint and resolution program under which every consumer complaint about URS collection practices must be thoroughly investigated and responded to by the company.
"Spanish-speaking consumers are a growing and vital part of America's economy. They deserve the same strong protection from abuse as other members of our society," said J. Howard Beales, III, Director of the FTC's Bureau of Consumer Protection. "Regardless of the language they speak, the FTC will protect the rights of all consumers."
In effect since March 1978, the FDCPA prohibits abusive, deceptive and unfair debt collection practices. For example, in an effort to collect a debt, a collector may not discuss the debt with anyone other than the consumer and certain other persons, such as the consumer's attorney or spouse. In addition, under the FDCPA, collectors may not make false statements, use obscene or abusive language, threaten to take legal action they cannot or do not intend to take, call consumers at work if they know it is inconvenient or not permitted by the employer, or call consumers at other times they know to be inconvenient to the consumer, such as before 8:00 a.m. or after 9:00 p.m.
According to the FTC's complaint detailing the charges, when attempting to collect debts in both English and Spanish, URS repeatedly violated the FDCPA by:
- Discussing details of the consumers' alleged debts with third parties, such as the consumers' parents, children, employers and co-workers;
- Communicating with consumers at times or places that the company knew or should have known to be inconvenient, including at the consumers' place of employment;
- Using language the natural consequence of which is to harass, oppress, or abuse;
- Falsely stating or implying that failure to pay the debt could result in arrest, imprisonment, or garnishment of wages; and
- Threatening to take action - such as filing a collection suit against the consumer - when the company did not intend to take such action.
The proposed consent decree to settle the allegations, in addition to requiring the $240,000 civil penalty, would prohibit the company from violating any provisions of the FDCPA in the future. Further, the proposed settlement would require URS clearly and conspicuously to disclose to consumers it contacts in writing that they may stop the company from contacting them about the debt. In addition, URS would be required to notify consumers that they may contact a special URS address or toll-free phone number if they have a complaint about the way URS is collecting the debt. To be clear and conspicuous, these disclosures must be made in Spanish when communicating with consumers in that language.
The proposed consent decree also requires URS to investigate promptly all consumer complaints it receives, take corrective action where necessary, and document in writing the results of each investigation and corrective action taken. Finally, the consent decree contains a number of reporting and record keeping requirements that will assist the FTC in monitoring compliance with the terms of the settlement.
This matter was handled by the FTC's Southwest Region in Dallas. The complaint and the proposed consent decree were filed by the Department of Justice on behalf of the FTC in the U.S. District Court for the Southern District of Texas, in Houston, Texas, today. The Commission vote to refer the complaint and proposed consent decree to DOJ for filing was 5-0.
The FTC has expanded its education efforts for Spanish-speaking consumers. The agency has a number of credit consumer brochures in Spanish including: "FTC FACTS: Fair Debt Collection"; "Credit and Your Consumer Rights"; and "Knee-Deep in Debt."
NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees are subject to the court's approval and have the force of law when signed by the judge.
Copies of the complaint and proposed consent decree are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. The FTC has free consumer brochures on over 150 topics, including many covering issues of debt and credit. Many of these are now available in Spanish. To request consumer brochures or to file a complaint, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or contact us at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
(Civil Action No.: H-02-1410 (sl))
(FTC File No.: 002-3133)
Office of Public Affairs
Southwest Region - Dallas
Bureau of Consumer Protection