Paul L. Seave
United States Attorney
Michael Hirst
Assistant United States Attorney
Chief, Civil Division
555 Capitol Mall
15th Floor
Sacramento, California 95814
Telephone (916) 554-2700
Attorneys for Plaintiff

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Plaintiff,

v.

Lundgren & Associates, P.C., a corporation, and Alvin R. Lundgren, individually and as an officer of said corporation,

Defendants.

C-98

CONSENT DECREE

WHEREAS: Plaintiff, the United States of America, has commenced this action by filing the Complaint herein; defendants have waived service of the Summons and Complaint; the parties have been represented by the attorneys whose names appear hereafter; and the parties have agreed to settlement of this action upon the following terms and conditions, without adjudication of any issue of fact or law and without defendants admitting liability for any of the matters alleged in the Complaint;

THEREFORE, on the joint motion of plaintiff and defendants, it is hereby ORDERED, ADJUDGED, AND DECREED as follows:

1. This Court has jurisdiction of the subject matter herein and of the parties.

2. The Complaint states a claim upon which relief may be granted against defendants under sections 5, 5(m)(1)(A), 9 and 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. 45, 45(m)(1)(A), 49, and 53(b), and section 814 of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. 16921.

DEFINITION

3. For purposes of this Consent Decree, the definitions set forth in the FDCPA, 15 U.S.C. 1692, shall apply.

INJUNCTION

4. Defendants, their successors and assigns, and their officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with any one or more of them who receive actual notice of this Consent Decree by personal service or otherwise, are hereby permanently enjoined from engaging, directly or through any corporation, subsidiary, division or other device, in any violations of the FDCPA, including but not limited to the following acts or practices in connection with the collection of a "debt" from a "consumer," as those terms are defined in sections 803(3) and (5) of the FDCPA, 15 U.S.C. 1692a(3) and (5):

a. Falsely representing the character, amount, or legal status of any debt, in violation of 15 U.S.C. 1692e(2)(A);

b. Falsely representing the compensation which may be lawfully received by any debt collector for the collection of a debt, in violation of 15 U.S.C. 1692e(2)(B);

c. Representing or implying to any consumer that any action will be taken by defendants unless at the time of the representation defendants or the creditor can legally take and intends to take such action, in violation of 15 U.S.C. 1692e(5);

d. Falsely representing or implying that the consumer committed any crime or other conduct in order to disgrace the consumer, in violation of 15 U.S.C. 1692e(7);

e. Using any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer, in violation of 15 U.S.C. 1692e(10);

f. Failing to disclose clearly in all communications made to collect a debt, except as provided for communications to acquire location information under section 804 of the Act, 15 U.S.C. 1692b, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, in violation of 15 U.S.C. 1692e(11); and

g. Using any unfair or unconscionable means to collect or attempt to collect a debt, including but not limited to collecting any amount (including any interest, fee, charge, or expense incidental to the principal obligation) not authorized by the original agreement or permitted by law, in violation of 15 U.S.C. 1692f.

5. Defendants, their successors and assigns, and their officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with any one or more of them who receive actual notice of this Consent Decree by personal service or otherwise, are hereby permanently enjoined from making, directly or through any corporation, subsidiary, division or other device, any misrepresentation of material fact in connection with the collection of a "debt" from a "consumer," as those terms are defined in sections 803(3) and (5) of the FDCPA, 15 U.S.C. 1692a(3) and (5), including but not limited to, that defendants have a right immediately to collect treble damages under state civil law and/or to collect additional amounts under criminal law, when such is not the case.

6. For a period of ten (10) years from the date of entry of this Consent Decree, defendants shall, whenever they have, directly or indirectly, the authority, power or ability to control, to direct, or to formulate the policies, acts, or practices of any debt collector, as defined in section 803(6) of the FDCPA Act, 15 U.S.C. 1692a(6), ensure that any such debt collector makes the following disclosures, clearly and conspicuously, in bold-face type no smaller than 10 points, in each written communication with any consumer in connection with the collection of debts:

(i) "Collection agencies like us must comply with a federal law that grants you certain rights. One of these is the right to have us stop communicating with you about this debt. If you write to us asking us to stop, we will. But if you owe this debt, you still owe it and your creditor may continue to collect it from you. This law is administered by the Division of Credit Practices, Federal Trade Commission, Washington, D.C., 20580."

(ii) "If you feel that the debt is being collected by unlawful means, you may contact the Division of Credit Practices, Federal Trade Commission, Washington, D.C., 20580."

CIVIL PENALTY

7. Defendants Alvin R. Lundgren and Lundgren & Associates, P.C., and their successors and assigns, shall jointly and severally pay pursuant to section 5(m)(1)(A) of the FTC Act, 15 U.S.C. 45(m)(1)(A), a civil penalty in the amount of one hundred fifty thousand dollars ($150,000); provided however, that this liability will be deemed satisfied subject to the provisions of paragraph 8 below.

8. Defendant Alvin R. Lundgren shall, within ten (10) days of the date of entry of this Consent Decree, submit a truthful sworn statement, in the form of Exhibit A to this Consent Decree, that shall reaffirm and attest to the truthfulness, accuracy, and completeness of defendant Lundgren’s financial statement that was executed on March 12, 1997, the Federal tax returns for the years 1993, 1994, and 1995, and the State tax returns for the years 1995 and 1996, submitted to the Federal Trade Commission (collectively "the Financial Statements"). The plaintiff's agreement to this Consent Decree is expressly premised on the truthfulness, accuracy, and completeness of defendant Lundgren’s financial condition as represented in the Financial Statements, which contain material information on which the plaintiff relied in negotiating and agreeing to this Consent Decree with the civil penalty set forth above. If, upon written motion by the plaintiff, duly noticed in accordance with the regular motion times set forth in the Local Rules of this Court, this Court finds that defendant Lundgren failed to submit the statement required by this paragraph, failed to disclose any material asset, or materially misrepresented the value of any asset, or made any other material misrepresentation in or omission from the Financial Statements, that determination shall cause the entire amount of monetary liability of one hundred fifty thousand dollars ($150,000) to become immediately due and payable, and interest computed at the rate prescribed in 28 U.S.C. 1961, as amended, shall immediately begin to accrue on the unpaid balance. Proceedings initiated under this paragraph are in addition to, and not in lieu of, any other civil or criminal remedies as may be provided by law, including any proceedings brought to enforce this Order.

PERSONS AFFECTED; CONTINUING JURISDICTION

9. Defendants, their successors and assigns, shall, within thirty (30) days of the entry of this Consent Decree, provide a copy of this Consent Decree and the FDCPA to each of their officers, agents, servants, employees and attorneys, secure from each such person a signed statement acknowledging receipt of a copy of the Consent Decree and the FDCPA, and shall, within ten (10) days of complying with this paragraph, file an affidavit with the Court and serve the Federal Trade Commission, by mailing a copy thereof, to the Regional Director, San Francisco Regional Office, Federal Trade Commission, 901 Market Street, Suite 570, San Francisco, California 94103, setting forth the fact and manner of their compliance, including the name and title of each person to whom a copy of the Consent Decree and the FDCPA has been provided.

10. For a period of ten (10) years from the date of entry of this Consent Decree, defendants, and their successors and assigns, shall provide a copy of this Consent Decree and the FDCPA to each of their officers, agents, servants, employees and attorneys having responsibilities with respect to the subject matter of this Consent Decree, within fifteen (15) days after such person commences his or her duties, and shall obtain from each such person a signed statement acknowledging receipt of this Consent Decree.

11. For a period of ten (10) years, from the date of entry of this Consent Decree, defendant Alvin R. Lundgren shall, within sixty (60) days of his acquisition of, affiliation or association with, or employment by any debt collector, as defined in section 803(6) of the FDCPA, 15 U.S.C. 1692a(6), provide copies of this Consent Decree to all owners, officers, directors, attorneys, and successors and assigns of the debt collector, and to all employees, agents or representatives of the debt collector who have any supervisory responsibility for collection of debts.

12. Defendant Lundgren and Associates, P.C., its successors and assigns, shall notify the Regional Director, San Francisco Regional Office, Federal Trade Commission, 901 Market Street, Suite 570, San Francisco, CA, 94103, at least thirty (30) days prior to any change in its business, including but not limited to merger, incorporation, dissolution, assignment, sale which results in the emergence of a successor corporation, the creation or dissolution of a subsidiary or parent, or any other change which may affect this defendant's obligations under this Consent Decree.

13. Defendants, their successors and assigns, shall, within sixty (60) days from the date of entry of this Consent Decree, and, for a period of ten (10) years, again on each anniversary of the date of entry of this Consent Decree, file with the Commission a written report setting forth in detail the manner and form of each defendant's compliance with this Consent Decree. Whenever defendants have, directly or indirectly, the authority, power or ability to control, direct or formulate the policies, acts or practices of any debt collector, as defined in section 803(6) of the FDCPA, 15 U.S.C. 1692a(6), this report shall include, but not be limited to, a specimen copy of each form letter that is used in connection with the collection of debts, for the period from the date of entry of this Consent Decree to the filing of such report.

14. For a period of ten (10) years following the date of entry of this Consent Decree, defendant Alvin R. Lundgren shall notify the Regional Director, San Francisco Regional Office, Federal Trade Commission, 901 Market Street, Suite 570, San Francisco, CA, 94103 of any change in the defendant's business or employment no later than thirty (30) days after such change has occurred. Such notice shall include the business address and telephone number; a description of defendant's duties and responsibilities and financial interest in the business; and an explanation of the specific business or employment change that required submission of such notice under the terms of this Paragraph.

15. For a period of ten (10) years from the date of entry of this Consent Decree, defendants, their successors and assigns, shall maintain and make available to the Federal Trade Commission, within seven (7) days of the date of receipt of a written request, business records demonstrating compliance with the terms and provisions of this Consent Decree.

16. This proceeding, and the relief awarded herein, is in addition to and not in lieu of other remedies as may be provided by law and available to the government, including both civil and criminal remedies.

17. This Court shall retain jurisdiction of this matter for the purpose of enabling any of the parties to this Consent Decree to apply to the Court at any time for such further orders or directives as may be necessary or appropriate for the interpretation or modification of this Consent Decree, for the enforcement of compliance therewith, or for the punishment of violations thereof.

JUDGMENT IS THEREFORE ENTERED in favor of plaintiff and against defendants pursuant to all the terms and conditions recited above.

Dated: , 19

UNITED STATES DISTRICT JUDGE

The parties, by their respective counsel, hereby consent to the terms and conditions of the Consent Decree as set forth above and consent to the entry thereof. Each party agrees to bear its own costs and attorneys' fees. Defendants waive any rights that might arise under the Equal Access to Justice Act, 28 U.S.C. 2412.

FOR THE UNITED STATES OF AMERICA:

FRANK W. HUNGER
Assistant Attorney General
Civil Division
U.S. Department of Justice

PAUL L. SEAVE
United States Attorney
Eastern District of California

By:

Assistant United States Attorney
555 Capitol Mall
15th Floor
Sacramento, CA 95814

EUGENE M. THIROLF
Director
Office of Consumer Litigation

ELIZABETH STEIN
Attorney
Office of Consumer Litigation
Civil Division
U.S. Department of Justice
Washington, D.C. 20530
(202) 307-0486

FOR THE FEDERAL TRADE COMMISSION

JEFFREY A. KLURFELD
Regional Director

SYLVIA KUNDIG, Attorney
Federal Trade Commission

FOR THE DEFENDANTS

ALVIN R. LUNDGREN, individually

ALVIN R. LUNDGREN
LUNDGREN & ASSOCIATES, P.C.
Attorney for the Defendants