Two Companies Settle Harassment Charges Relating to Debt Collection

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Two companies whose representatives allegedly harassed consumers with multiple phone calls and abusive language have agreed to settle Federal Trade Commission charges that their business practices violated federal law. The FTC’s complaint against Applied Card Systems alleged that, as part of the companies’ debt collection practices, representatives repeatedly call third parties who had already told them they did not have any information about the consumers from whom the companies were trying to collect payments.

According to the FTC, representatives of Applied Card Systems, Inc., and Applied Card Systems of Pennsylvania, Inc., call third parties, including relatives, neighbors, and employers, attempting to get information about where consumers live or work in order to contact them about a delinquent debt. The FTC alleges that the representatives have continued to call these third parties, even after they have told the representatives that the consumer they are looking for does not reside or work with them. Many of the third parties requested that the representatives stop calling them. The FTC charges that, in many cases, the companies’ representatives harassed the third parties with repeated phone calls, and abusive, sometimes obscene, language.

The consent order bars the respondents from:

  • Contacting any third party more than once unless the third party requests that they do so, or unless they reasonably believe that the third party gave them incorrect or incomplete information and now has further information;

  • Harassing third parties with abusive or obscene language or repeated phone calls;

  • Communicating with a consumer to collect on a delinquent debt: (1) at a time or place the consumer has said is inconvenient; (2) at the consumer’s place of employment if the consumer has already stated that the employer prohibits personal phone calls; and (3) if the consumer is represented by an attorney with respect to the debt;

  • Falsely representing to consumers the amount or status of a debt or threatening to take action against a consumer that they do not intend to take or that is illegal to take;

  • Collecting any amount other than the amount expressly stated in the agreement creating the debt; and

  • Applying a consumer’s payment in a way that the consumer has not directed.

The proposed consent agreement also contains standard record keeping requirements to assist the FTC in monitoring the Respondents’ compliance.

The Commission vote to accept the consent agreement was 5-0. The FTC will publish an announcement regarding the agreement in the Federal Register shortly. The agreement will be subject to public comment for 30 days, until September 24, 2004, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, Room H-159, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

Copies of the complaint, proposed consent agreement, and an analysis of the agreement to aid in public comment are available from the FTC’s Web site at 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. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at 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.

(FTC File No. 032-3040)

Contact Information

Media Contact:
Jen Schwartzman
Office of Public Affairs
Staff Contact:
Jessica D. Gray or Barbara E. Bolton
FTC Southeast Regional Office
404-656-1350 or 404-656-1362