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From Antitrust Law Daily, July 9, 2013

Debt collection operation agrees to pay $3.2 million civil penalty to settle FTC charges

By Tobias J. Gillett, J.D., LL.M.

Expert Global Solutions, Inc. and its subsidiaries have agreed to settle FTC charges that it violated the FTC Act and the Fair Debt Collection Procedures Act (FDCPA) when placing debt collection calls to consumers, the agency announced today (United States v. Expert Global Solutions, Inc., FTC File No. 1023201, Case No. 3-13 CV 2611-M). The proposed order would require Expert to pay a civil penalty of $3.2 million and reform certain of its debt collection practices.

According to the FTC’s complaint, filed in the federal district court in Dallas, Expert engaged in debt collection throughout the United States, and would often attempt to collect debts through the telephone. Expert would allegedly continue to call consumers even after they had informed Expert that they did not owe the debt Expert was seeking to collect, frequently without obtaining more information about whether the consumer was the person Expert was seeking to contact, or whether the consumer owed the debt. Expert would often do so even after representing that it would take steps to ensure it would no longer contact them.

The FTC alleged that Expert would also frequently contact persons other than the consumers to attempt to obtain information about the consumers, even when it was not reasonable to believe that a person had provided false or incomplete information. In addition, Expert would allegedly place calls to consumers “with the intent to annoy, harass, or abuse,” including calling after being told to stop, calling multiple times per day, or calling consumers at work. Expert would call consumers’ workplaces even when it knew the consumers would find it “inconvenient,” or when the employer had prohibited employees from receiving personal calls, and would leave messages disclosing that Expert was attempting to collect a debt from the consumer when persons other than the consumer could hear the message.

The FTC charged that Expert’s unsubstantiated representations about consumers owing debts and deceptive representations about whether Expert would make future calls constituted violations of the FTC Act, and that Expert’s misrepresentations in connection with the collection of a debt, multiple communications with other persons about the location of consumers, communications at unusual or inconvenient times, unlawful communications about consumers’ debts with third parties, failure to cease communications after consumers requested Expert to stop contacting them, and harassing telephone calls violated the FDCPA.

Under the proposed order, Expert must pay a civil penalty change some of the methods it uses to collect debts. The order would enjoin Expert from making misrepresentations in connection with the collection of debts; from communicating with third parties about consumers’ debts, except where permitted by the FDCPA; communicating with third parties other than the debtor more than once for the purposes of obtaining location information, except where Expert has good reason to believe the information originally given was incorrect or incomplete; “[e]ngaging in conduct the natural consequence of which is to harass, oppress, or abuse a person”; communicating with a person at a place or time known to be inconvenient; communicating with a debtor after the debtor has requested Expert to in writing to cease communications, except under limited circumstances; and violating any provision of the FDCPA.

The order also would enjoin Expert from representing that a person owes a debt unless Expert can substantiate it. If a consumer disputes a debt, Expert would have to either cease collection efforts, or suspend collection efforts until it had conducted a reasonable investigation to determine that its information was accurate and complete. The order would also limit the circumstances under which Expert could leave a voice message stating both (1) the first or last name of the debtor, and (2) that Expert is a debt collector, that it is attempting to collect a debt, or that the debtor owes a debt, and would bar Expert from placing excessive telephone calls.

The order would require Expert to begin recording at least 75 percent of its debt collection calls not later than one year after entry of the order, retain them for a period of at least 90 days, and continue recording them for a period of six years. Expert would also have to include a disclosure notice in all written debt collection communications to consumers for a period of five years.

Companies: Expert Global Solutions, Inc.

MainStory: TopStory ConsumerProtection FederalTradeCommissionNews

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