The Federal Trade Commission obtained the largest civil penalty in its history against a third-party debt collector earlier this month when the agency reached a $3.2 million settlement with Texas-based Expert Global Solutions and its subsidiaries.
The defendants violated the Fair Debt Collection Practices Act and the Federal Trade Commission Act, according to the agency, by repeatedly calling consumers to collect debts early in the morning or late at night, by making calls to consumers’ workplaces, and by continuing to call even when requested to stop. The defendants continued calling even when consumers said they did not owe the debt and it had not been verified.
Messages revealing the debtor’s name and the existence of the debt were also left with third parties, the FTC said. “In many instances, individuals other than the consumer hear the message, thereby disclosing consumers’ alleged debts to persons other than the consumer without the prior consent of the consumer,” according to the complaint.
The proposed consent order contains a laundry list of prohibitions, including a halt on future violations of the FDCPA, a ban on harassing, oppressing, and abusive collection tactics, and an end to the use of any false, deceptive, or misleading representations in connection with the collection of a debt. If a consumer disputes the validity or amount of the debt, the defendants agreed to suspend collection efforts until a reasonable investigation has been conducted.
Restrictions on communications with third parties about a consumer’s debt, as well as communications with a debtor at his or her workplace are also included. In addition, the defendants will record at least 75 percent of all of their debt calls and retain the recordings for 90 days.
The agreement is subject to approval by the federal court in the Northern District of Texas, where the complaint was filed.
An international conglomerate with revenue of more than $1.2 billion in 2011 and with operating subsidiaries in the United States, Expert Global Solutions has more than 32,000 employees and is the largest debt collector in the world, the agency said. It collects debts in Barbados, Canada, India, Panama, and the Philippines.
To read the complaint in U.S. v. Expert Global Solutions, click here.
To read the proposed consent decree, click here.
Why it matters: The record settlement serves as a reminder not only to abide by the requirements of the FDCPA, but also to avoid false and deceptive business tactics generally – or face potential regulatory action.