United Creditors Alliance Corporation, a major nationwide debt collection agency, has agreed to pay a $146,000 civil penalty in settlement of Federal Trade Commission charges that it repeatedly violated the Fair Debt Collections Practices Act (FDCPA). The FTC alleged that United Creditors called after hours; used obscene, profane or abusive language; falsely threatened consumers with arrest, garnishment of wages, or other legal action and engaged in a variety of other FDCPA violations when attempting to collect debts from consumers. The settlement, filed in federal court, would prohibit the Columbus, Ohio-based company from violating the FDCPA and require it to pay the civil penalty.
The FDCPA prohibits abusive, unfair or deceptive debt collection practices. Under the FDCPA, a debt collector may not use obscene, abusive, or profane language, or contact a consumer at inconvenient times, such as before 8 a.m. or after 9 p.m. Also, debt collectors may not make false statements, use false names, or threaten a legal action they do not intend to take.
In the past few years, the FTC has taken action against approximately 20 individuals and companies for alleged debt collection practices abuse. "Among the Commission's concerns in these types of cases," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection, "is that some consumers may not actually owe the debts, but may pay them in order to stop the abuse."
Consumers' rights and debt collectors' responsibilities under the FDCPA are outlined in a consumer brochure, "Fair Debt Collection," which is available from the FTC's Public Reference Branch, at the address below.
United Creditors Alliance collects all types of retail and commercial debts, and has offices in Anaheim, California; Columbus, Ohio and Atlanta, Georgia.
The FTC's complaint detailing the charges in this case cites numerous FDCPA violations, among them, that United Creditors:
- contacted consumers at times or places they knew or should have known to be inconvenient to the consumer, such as before 8 a.m or after 9 p.m.;
- called consumers at work when they knew the consumers' employers prohibited such calls;
- continued to contact consumers after having received written requests to cease doing so;
- used obscene, profane or abusive language;
- let telephones ring repeatedly at consumers' homes with the intent to annoy or harass;
- falsely represented that they were attorneys or that communications were from an attorney;
- contacted third parties about the debt; and
- falsely threatened that nonpayment of a debt would result in arrest or imprisonment, or that a consumer's wages would be garnished.
The consent decree settling the charges would specifically prohibit UCA from engaging in the above practices or otherwise violating the FDCPA in the future, and would require the $146,000 civil penalty to be paid within five days. Additionally, the proposed settlement would require the company, for three years, to inform consumers of their right to ask the debt collector to stop contacting them by providing the following notice to consumers, on each initial written communication:
"The law requires us to stop contacting you about this debt if you write to us and ask us to stop. However, under the law, we may still contact you for two reasons:
- to advise you that we or your creditor intend(s) to invoke specific remedies permitted by law; or
- to advise you that our efforts are being terminated."
United Creditors is not precluded from advising consumers that, if they owe a debt, they will still owe it and their creditors may continue to collect it.
Further, the settlement would require UCA, for three years, to provide a notice to present and newly-hired employees telling them that they must comply with the federal Fair Debt Collection Practices Act, in trying to collect money from consumers. The notice also informs the employees that, unless the consumer consents, a debt collector may not discuss the debt with any person other than the consumer and a few other persons, such as the consumer's attorney or spouse, and that individual debt collectors may be financially liable for their violations of the Act.
Finally, the settlement contains a number of recordkeeping requirements to assist the Commission in monitoring UCA's compliance with the settlement.
The Commission vote to authorize filing of the settlement was 5-0. The complaint and proposed consent decree were filed in U.S. District Court for the Central District of California, in Santa Ana, on Sept. 10, 1996, by the Department of Justice at the request of the FTC.
NOTE: This consent decree is for settlement purposes only and does not constitute admission of a law violation. A consent decree has the force of law when signed by the judge.
Copies of the complaint and consent decree, and the consumer brochure are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710 FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov
(Civil Action No. SA-CV96-861(GLT)(EEx)
(FTC File No. 932-3142)
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