FOR RELEASE: MAY 26, 1992 DEBT COLLECTOR AGREES TO PAY $100,000 TO SETTLE FTC CHARGES OF HARASSING, THREATENING CONSUMERS Credit Claims & Collections, a debt-collection company, has agreed to pay a $100,000 civil penalty to settle Federal Trade Commission charges that it harassed and threatened consumers from whom it was attempting to collect debts for clients. According to the FTC complaint, Credit Claims employees allegedly used obscene language, threatened to use violence, contacted consumers at their jobs, let the telephone ring repeatedly at their homes, and falsely implied that they were affiliated with the government, among other alleged violations of the Fair Debt Collection Practices Act (FDCPA). In addition to the civil penalty, the proposed consent decree to settle the FTC charges includes broad prohibitions on future FDCPA violations, and would require Credit Claims to inform -- in writing -- the consumers it contacts that Federal law prohibits a debt collector from harassing them. The FTC complaint names Nationwide Credit, Inc., doing busi- ness as Credit Claims & Collections, of Atlanta, Georgia. In addition to the above alleged violations of the FDCPA, the FTC charged that, on numerous occasions, Credit Claims employees have, in violation of the act: -- contacted consumers directly when they knew the consumer was represented by an attorney with respect to the debt at issue: - more - Credit Claims--05/26/92) -- called consumers at work when they knew the consumers' employers prohibited such calls; -- continued to call consumers after receiving a written request to cease communications; -- talked with third parties about something other than locating consumers, without consumers' consent; -- falsely implied that they were attorneys, and that failure to pay the debt could result in arrest, imprisonment, or garnishment of wages; -- threatened to take action -- such as filing a lawsuit, getting the consumer fired, or communicating with law- enforcement officials -- when they did not intend to do so; -- solicited postdated checks in order to threaten or insti- tute criminal prosecution, and then deposited or threatened to deposit postdated checks prior to the date on the checks; and -- continued to try to collect debts after consumers disputed them in writing, and before the defendants verified the debts. The FDCPA prohibits abusive, deceptive and unfair debt-col- lection practices. For example, under the FDCPA, a debt collec- tion agency may contact any person in attempting to locate a consumer from whom it is trying to collect a debt but, in most cases, cannot refer to the debt in any way during the conversation and cannot contact that person more than once; nor can debt collectors identify themselves as such on the outside of envelopes mailed to consumers, use postcards, or advertise a consumer's debt. Also, debt collectors cannot make false statements or use false names, threaten to take legal action they do not intend to take, or call consumers before 8 a.m. or after 9 p.m. unless they know that it is not objectionable to the consumer. In addition to the $100,000 civil penalty and permanent injunctions against further violations of the FDCPA, the proposed consent decree settling the FTC charges against Credit Claims would require that whenever Credit Claims communicates in writing with a consumer, it must include the following clear and conspic- uous disclosure: "Federal law prohibits a debt collector from harassing you about a debt and gives you the right to stop it when it happens. However, if you owe the debt, you will still owe it and your creditor may continue to collect it from you in a proper manner..." Credit Claims--05/26/92) The required disclosure goes on to tell consumers how to learn more about their rights under the FDCPA by writing for a free brochure, and instructions them to complain to the FTC if they believe these rights have been violated. The FTC will review any such complaints as it monitors Credit Claims' compliance with the decree. The FTC's brochure explaining the FDCPA is available free by writing: FTC, Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY 202-326-2502. The proposed consent decree was filed on May 22 by the Department of Justice at the request of the FTC. It is subject to court approval. NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees have the force of law when signed by the judge. Copies of the complaint and proposed consent decree are available from the FTC's Public Reference Branch at the above address. # # # MEDIA CONTACT: Bonnie Jansen, Office of Public Affairs 202-326-2161 STAFF CONTACT: Paul K. Davis, Atlanta Regional Office 1718 Peachtree Avenue N.W., Room 1000 Atlanta, Georgia 30367 404-347-4836 (Civil Action No. 1-92-CV-1219-MHS) (ccc)
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