IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION

UNITED STATES OF AMERICA, Plaintiff,

v.

PERIMETER CREDIT, L.L.C. and ACCOUNT PORTFOLIOS, INC., Defendants.

Civil Action No.

COMPLAINT FOR CIVIL PENALTIES, INJUNCTIVE AND OTHER RELIEF

Plaintiff, the United States of America, acting upon notification and authorization to the Attorney General by the Federal Trade Commission ("Commission"), for its Complaint alleges that:

  1. Plaintiff brings this action under Sections 5(m)(1)(A), 9, 13(b), and 16(a) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C.  45(m)(1)(A), 49, 53(b), and 56(a), and Section 814 of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. 1692l, to obtain monetary civil penalties and injunctive or other relief for Defendants' violations of the FDCPA.

JURISDICTION AND VENUE

  1. This Court has jurisdiction over this action pursuant to 28 U.S.C.  331, 1337(a), 1345, and 1355, and under 15 U.S.C.  45 (m)(1)(A), 49, 53(b), 56(a), and 1692l.
  2. Venue in the Northern District of Georgia is proper under 28 U.S.C.  1391(b)-(c) and 1395(a).

DEFENDANTS

  1. Defendant Account Portfolios, Inc. ("API") is a corporation, with its principal place of business at 5000 Riverdale Court, Atlanta, Georgia 30337-6074. Defendant Perimeter Credit, L.L.C. ("Perimeter"), a subsidiary of API, is a limited liability company with its principal place of business at 3300 Northeast Expressway, Atlanta, Georgia 30341. API has control over the hiring, firing, compensation, and training for the employees of Perimeter. At all times relevant to this Complaint, API and Perimeter have transacted business in the Northern District of Georgia.
  2. API and Perimeter are debt collectors, as the term "debt collector" is defined in Section 803(6) of the FDCPA, 15 U.S.C.  1692a(6).
  3. The activities of Defendants forming the basis of this Complaint concern the collection of debts from consumers, as the terms "debt" and "consumer" are defined in Sections 803(3) and 803(5) of the FDCPA, 15 U.S.C.  1692a(3) and 1692a(5).

FAIR DEBT COLLECTION PRACTICES ACT

  1. In 1977, Congress passed the Fair Debt Collection Practices Act, 15 U.S.C.  1692-1692o, which became effective on March 20, 1978, and which has been continuously in force ever since that date. Section 814 of the FDCPA, 15 U.S.C.  1692l, authorizes the Commission to use all of its functions and powers under the FTC Act to enforce compliance with the FDCPA by any debt collector, irrespective of whether that debt collector is engaged in commerce or meets any other jurisdictional tests set by the FTC Act, including the power to enforce the provisions of the FDCPA in the same manner as if the violations were violations of a Federal Trade Commission trade regulation rule.

VIOLATIONS CHARGED

  1. On numerous occasions, in connection with the collection of debts originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation, Defendants have communicated with consumers at times or places that Defendants knew or should have known to be inconvenient to the consumers, including the consumers' places of employment, in violation of Section 805(a)(1) of the FDCPA, 15 U.S.C.  1692c(a)(1).
  2. On numerous occasions, in connection with the collection of debts originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation, Defendants have communicated with consumers at the consumers' places of employment when Defendants knew or should have known that the consumers' employers prohibited the consumers from receiving such communication, in violation of Section 805(a)(3) of the FDCPA, 15 U.S.C.  1692c(a)(3).
  3. On numerous occasions, in connection with the collection of debts originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation, Defendants have communicated with third parties for purposes other than acquiring location information about the consumers, without the prior consent of the consumers given directly to Defendants, or the express permission of a court of competent jurisdiction, and when not reasonably necessary to effectuate a post-judgment judicial remedy, in violation of Section 805(b) of the FDCPA, 15 U.S.C.  1692c(b).
  4. On numerous occasions, in connection with the collection of debts originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation, Defendants have communicated with consumers after the consumers notified them in writing that they refused to pay a debt or that they wished Defendants to cease further communication with them, in violation of Section 805(c) of the FDCPA, 15 U.S.C.  1692c(c).
  5. On numerous occasions, in connection with the collection of debts originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation, Defendants have engaged in conduct the natural consequence of which is to harass, oppress, or abuse a person-- including, but not limited to, the use of obscene or profane language, the natural consequence of which is to abuse the hearer -- in violation of Section 806 of the FDCPA, 15 U.S.C. 1692d.
  6. On numerous occasions, in connection with the collection of debts originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation, Defendants have used false, deceptive, or misleading representations or means -- including, but not limited to, communicating or threatening to communicate to persons credit information which is known or which should be known to be false, including failing to communicate that a disputed debt is disputed -- in violation of Section 807 of the FDCPA, 15 U.S.C. 1692e.
  7. On numerous occasions, in connection with the collection of debts originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation, Defendants have failed to notify consumers of their right to dispute and obtain verification of their debts and to obtain the name of the original creditor, either in Defendants' initial communication with consumers or within five days thereafter, in violation of Section 809(a) of the FDCPA, 15 U.S.C. 1692g(a).
  8. On numerous occasions, in connection with the collection of debts originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation, when consumers have notified Defendants in writing within the thirty (30) day period described in Section 809(a) of the FDCPA, 15 U.S.C. 1692g(a), that the debts, or any portion thereof, were disputed, Defendants have continued to attempt to collect debts before verification of the debts was provided to consumers, in violation of Section 809(b) of the FDCPA, 15 U.S.C. 1692g(b).

CIVIL PENALTY AND INJUNCTION

  1. Defendants have violated the FDCPA, as described above, with actual knowledge or knowledge fairly implied on the basis of objective circumstances, as set forth in Section 5(m)(1)(A) of the FTC Act, 15 U.S.C.  45(m)(1)(A).
  2. Each instance within the five years preceding the filing of this Complaint in which Defendants failed to comply with the FDCPA in one or more of the ways described above constitutes a separate violation of the FDCPA for which Plaintiff seeks monetary civil penalties.
  3. Section 5(m)(1)(A) of the FTC Act, 15 U.S.C.  45(m)(1)(A), Section 814 of the FDCPA, 15 U.S.C.  1692l, and Section 4 of the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C.  2461, as amended, authorize the Court to award monetary civil penalties of not more than $10,000 ($11,000 after November 20, 1996) for each violation of the FDCPA.
  4. Under Section 13(b) of the FTC Act, 15 U.S.C.  53(b), this Court is authorized to issue a permanent injunction to ensure that Defendants will not continue to violate the FDCPA.

PRAYER

WHEREFORE, Plaintiff respectfully requests this Court, pursuant to 15 U.S.C. 45(m)(1)(A), 49, 53(b), 56(a), and 1692l, and its own equitable powers:

  1. Enter judgment against Defendants and in favor of Plaintiff for each violation of the FDCPA alleged in this Complaint;
  2. Award Plaintiff monetary civil penalties from Defendants for each violation of the FDCPA occurring within five years preceding the filing of this Complaint;
  3. Order Defendants to include the following disclosure in each written communication with a consumer in connection with the collection of a debt originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation:

The law requires us to stop contacting you about this debt if you write us and ask us to stop. However, under the law, we may still contact you for two reasons:

  • To advise you that we intend to pursue specific remedies permitted by law; or
  • To advise you that our efforts are being terminated.

This law is enforced by the Federal Trade Commission, Washington, D.C. 20580;

  1. Order Defendants to provide the following notice in writing to each of their present and future employees involved in the collection of debts, and to obtain and retain a signed acknowledgment of receipt of the notice from each such employee:

Debt collectors must comply with the federal Fair Debt Collection Practices Act, which limits our activities in trying to collect money from consumers. Most importantly, Section 806 of the Act prohibits you from harassing, oppressing, or abusing a person, including, but not limited to, using obscene or profane language. In addition, Section 807 of the Act prohibits you from using false, deceptive, or misleading representations, including communicating false information about a person's credit history. Individual debt collectors may be financially liable for their violations of the Act;

  1. Enjoin Defendants permanently from violating the FDCPA in the future;
  2. Order Defendants to pay the costs of this action; and
  3. Award Plaintiff such additional relief as the Court deems just and proper.

Dated: This _____ day of ______________ 1999.

FOR THE UNITED STATES OF AMERICA:

DAVID W. OGDEN
Acting Assistant Attorney General
Civil Division
U.S. Department of Justice

RICHARD H. DEANE, JR.
United States Attorney
Northern District of Georgia

By: __________________________
Assistant United States Attorney
Northern District of Georgia
Richard B. Russell Federal Building
75 Spring Street, SW
Atlanta, GA 30335

EUGENE THIROLF
Director
Office of Consumer Litigation
Civil Division

By: _________________________
ELIZABETH STEIN
Office of Consumer Litigation
U.S. Department of Justice
Washington, D.C. 20530
(202) 307-0486

OF COUNSEL:

David Medine
Associate Director for Financial Practices
Bureau of Consumer Protection

Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580

Anthony E. DiResta
Regional Director
Atlanta Regional Office
Federal Trade Commission
60 Forsyth Street, S.W.
Suite 5M35
Atlanta, Georgia 30303
(404) 656-1364