US $2.8 Million Civil Penalty for Debt Collector

A large US Debt Collection company - West Asset Management agreed to pay a civil penalty of  US $2.8 million to settle charges brought against it by the Federal Trade Commission. West Asset Management employs over 1,300 collectors in 13 states and one offshore location. They have collected on more than 24million accounts on behalf of their clients in the healthcare, telecommunications, consumer credit and government industries.

The complaints listed in the Federal Trade Commissions filing included;
- calling consumers more than once each day
- calling consumers about accounts that did not belong to them
- using rude and abusive language
- illegally disclosing the existence of consumer debts to third parties
- ignoring consumers written demands that West Asset Management do not call them
- illegally withdrawing funds from consumers bank accounts
- charging consumer credit cards without consent
- falsely claiming that partial payments would be accepted as full settlements
- falsely claiming that negative information would stay on consumers credit reports until debts were paid.

Whilst this is an American case, you will note there are a number of similarities between the complaints listed above and the ACCC & ASIC Guide to Debt Collection in Australian - the framework that Collection Agencies follow in Australia.

Interestingly the Federal Trade Commission in America will be reviewing how debt collectors operate in a Workshop to be held in April. One of the purposes of this workshop will be to look at how the FTC can better protect consumers from Debt Collectors using advanced technologies to effectively pursue debts. This will be something to follow, as Australian agencies (ACCC & ASIC) may look to this workshop for future guidance. Any changes would not be immediate, we would envisage a 12 - 24 month timeframe.