In the first Federal Trade Commission (FTC) action against a debt collector who used text messaging in their efforts to collect debts in an unlawful manner, the California based collector will pay $1 million to settle the charges that they violated federal law.
It was alleged by the FTC that Archie Donovan and two companies he controls, National Attorney Collection Services, Inc. and National Attorney Services LLC, sent text messages and made phone calls to debtors in which defendants did not disclose that they were debt collectors. The defendants were charged with violating the Fair Debt Collection Practices Act (FDCPA) and the FTC Act.
The FDCPA contains many provisions regarding prohibitions on the conduct of debt collectors. Such violations can bring about civil liability for debt collectors. For instance, under the FDCPA debt collectors cannot:
- Misrepresent the amount owed,
- Add on any extra fees not under the original credit or loan agreement,
- Call the debtor repeatedly or continuously,
- Use obscene, profane, or abuse language when speaking to the debtor,
- Call before 8 am or after 9 pm,
- Call when the debt collector knows or should know it is inconvenient,
- Use or threaten the use of violent for nonpayment,
- Threaten action they cannot or will not take,
- Inform a third party about the debt illegally, and
- Call a third party repeatedly to obtain location information.
In addition to not identifying themselves as debt collectors in their text messages, phone calls, and mailings, the defendants gave the false impression that they were law firms when they used the names National Attorney Services, National Attorney Service, National Attorney, and Abogados Nacionales. The defendants also threatened to sue consumers for non-payment of their debt or to begin garnishing their wages. This is clearly a deceptive practice and prohibited by the FDCPA.
It was also alleged by the FTC that Donovan and the companies violated the FDCPA when they revealed debts to the family members, friends, and co-workers of consumers. In addition, sending mailings to consumers they used envelopes that pictured a large arm shaking money from an upside down consumer. This violated the law since mailing envelopes can only include the name and address of the company, and cannot indicate that there may be a debt owed by the consumer. The reason for not allowing debt collectors to disclose someone’s private debts is that doing so could endanger the consumer’s job and reputation.
The settlement also requires the defendants to cease sending text messages that do not include the required disclosures as well as obtain the consumer’s express consent before the debt collector can contact them through text message. Additionally, they have been barred from claiming to be law firms when they are not and they cannot falsely threaten to sue or take action if they do not intend to take such action.
Our experienced attorneys here at Krohn and Moss Consumer Law Center have also provided many helpful resources regarding the FDCPA and how debt collectors should act. For more information, click here to learn more about this act and how it can help you.
We understand the frustration you may have when dealing with an aggressive debt collector. We have been successfully representing those abused and taken advantage of by debt collectors for years, and have a long list of successful stories to share with you. We offer a FREE CASE REVIEW for you to assess whether we can assist you with your matter. Please do not hesitate to contact us toll free at 1-800-875-3666 if you prefer to talk to a trained professional over the phone instead, or of course, visit our website at http://www.westopdebtcollectors.com.