This year, the debt collection industry has clamored to amend the Telephone Consumer Protection Act and the Fair Debt Collection Practices Act to allow them greater leeway in calling consumers’ cell phones. According to a recent press release issued by WhitePages, some debt collectors outshine the competition in pestering consumers with unwanted calls. WhitePages named the most aggressive “Call Spammers” of 2011, defining call spamming as unwanted calls or texts to mobile phones, and debt collection agencies nabbed six out of the top ten spots. Allied Interstate topped the list, followed by CBE Group, CMI Group, ER Solutions/Convergent, Portfolio Recovery Associates, Satlander.
Minnesota Department of Commerce Tackles Debt Collection Business Practices
Minnesota Department of Commerce Commissioner Mike Rothman announced that seven debt collection agencies signed consent orders and agreed to pay fines after being investigated by the state agency for business practices that violated state law. Charges were brought against an eighth debt collection agency, but that agency is fighting the charges.
The consent orders read like a Who’s Who of the debt collection industry. Here are excerpts of the charges, as enumerated in the Commissioner’s press release:
Allied Interstate: 1) failing to establish adequate screening procedures when hiring individual collector applicants; 2) failing to properly screen debt collector registrations before submitting license renewal requests to the Commissioner; 3) employing debt collectors with prior felony convictions; and 4) failing to report when its registered debt collectors were fired for failing background checks, swearing at debtors, theft of debtor’s financial information, or falsifying debtor records.
Bureau of Collection Recovery: 1) directing employees to change the dates of scheduled payments; 2) changing the dates of deposit for postdated payments; 3) failing to establish adequate screening procedures when hiring collector applicants; 4) failing to properly screen numerous debt collector registrations before submitting license renewal requests to the Commissioner; 5) employing collectors with felony criminal backgrounds; and 6).failing to notify the Commissioner of employee terminations for using profanity, third party disclosure violations, and harassing debtors.
AllianceOne: 1) failing to establish adequate screening procedures when hiring individual collector applicants; and 2) employing debt collectors with prior felony convictions.
Van Ru Credit Corporation: 1) failing to establish adequate screening procedures when hiring individual collector applicants; 2) failing to properly screen debt collector registrations before submitting license renewal requests to the Commissioner; 3) employing three collectors with felony criminal backgrounds; and 4) failing to notify the Commissioner of at least 15 employee terminations for verbally abusing debtors, using profanity, and third party disclosure violations.
IC System: 1) failing to establish adequate screening procedures when hiring individual collector applicants; 2) failing to properly screen debt collector registrations before submitting license renewal requests to the Commissioner; 3) employing collectors with felony criminal backgrounds; 4) failing to notify the Commissioner of at least 10 employee terminations for using profanity, third party disclosure violations, and repeatedly calling debtors at their places of employment; and 5) allowing at least 23 debt collectors to work at locations that were not licensed.
General Revenue Corporation: 1) failing to establish adequate screening procedures when hiring individual collector applicants; 2) failing to properly screen numerous debt collector registrations before submitting license renewal requests to the Commissioner; 3) employing a collector with a felony criminal background; and 4) failing to notify the Commissioner of at least 40 employee terminations for using profanity, third party disclosure violations, and threatening an alleged debtor on MySpace.
Nationwide Recovery Systems: Commingling trust account funds collected for creditors with the agency’s operating fund, thereby engaging in an act or practice that demonstrated the firm was untrustworthy, financially irresponsible, or otherwise incompetent.
Commercial Recovery Corporation: 1) failing to pay vendors, including CP Office Products (Circle Pines, MN); 2) failing to collect thousands of dollars from alleged debtors and failing to remit those payments to clients, including Brown & Bigelow (St. Paul, MN) and ADvantage Tape (Edina, MN); 3) holding a negative balance on one or more of its trust accounts; 4) providing false information to the Commissioner; 5) failing to pay rent in the amount of $99,700; 6) failing to retrieve sensitive records from the company’s landlord following eviction; and 7) defaulting on a Promissory Note due to CRC’s bank in the amount of $278,809. Commercial Recovery did not sign a consent order.
Major Debt Collection Agencies Targeted by Minnesota
We regularly discuss the problem of debt collectors crossing the line into abhorrent behavior. What isn’t as well-known is that some debt collectors have criminal histories. The Minneapolis Star-Tribune has done an outstanding job of investigating the underbelly of the debt collection industry, and recently reported that the state’s Commerce Commission, Mike Rothman, has put debt collection agencies on notice. State law says that debt collection agencies must conduct criminal background checks on their collectors, but Rothman is alleging that some of the major players have failed to do so.
Rothman notified Allied Interstate, AllianceOne, Bureau of Collection Recovery, I.C. System, Financial Recovery Services, NCO Financial Systems, Receivable Management Solutions, and Van Ru Credit Corp. that he’s prepared to go after their business licenses, and that his office must review their screening procedures. The Star Tribune found that one in 12 debt collectors had criminal records in Minnesota.
Allied Interstate to Pay $1.75 Million Settlement
The Federal Trade Commission recently announced that it had reached a settlement with debt collection industry giant Allied Interstate, and that the debt collector will pay a $1.75 million fine – the second largest fine ever paid in a debt collection case.
The settlement arose from an FTC suit alleging that Allied Interstate made repeated phone calls in an attempt to collect from the wrong consumer, to collect the wrong amount, or both. The FTC issued a press release, which said in part:
According to the FTC’s complaint, between 2006 and at least 2008, Allied Interstate, Inc. continued collection efforts even after consumers told the company they did not owe the debt, without verifying the accuracy of the disputed information. Allied is a Minnesota corporation that works out of offices in the United States, Canada, India, and the Philippines. The company also allegedly made improper harassing phone calls to consumers, using abusive language or calling many times a day for weeks or months, sometimes hanging up when the calls were answered. In addition, the complaint charges that Allied made repeat calls to third parties seeking to locate a consumer, revealed alleged debts to third parties without the consumers’ consent or court permission, and threatened legal action against consumers it did not intend to take. The complaint alleges that these practices violated the Fair Debt Collection Practices Act and Section 5 of the Federal Trade Commission Act.
Kudos to the FTC for calling Allied Interstate on their egregious behavior.
Allied Interstate Adds Do Not Call Violations to Its Record
Many consumers who are on the receiving end of Allied Interstate debt collection calls experience harassment and other illegal tactics as defined under the federal Fair Debt Collection Practices Act. It shouldn’t come as a surprise then, that Allied Interstate has also racked up a lot of complaints by consumers who have opted in to the Do Not Call registry.
According to an article in the Washington Examiner, 7,784 Do Not Call complaints were filed against Allied Interstate. Unfortunately, the DNC law doesn’t apply to debt collection agencies, so the Federal Trade Commission can’t nab Allied Interstate for violations.
Charles Pekow, the columnist who wrote the Examiner piece, did a great job connecting the dots between Allied Interstate and, for example, DirectTV, an Allied Interstate client who is among the top 10 offenders of the DNC law.
Texas Man Fights Allied Interstate
Allied Interstate debt collection agency is like a dog with a bone – even when they’re barking up the wrong tree. As reported by KGBT 4, a South Texas man was hounded by Allied Interstate, which was trying to get the man to pay for a phone bill that wasn’t his. In fact, he never even had service from that telephone provider.
In the process, Allied Interstate repeatedly attempted to get the man’s social security number and address. This is a good reminder that you should never give your social number to someone over the phone, and that you shouldn’t allow yourself to be coerced into paying a bill that’s not yours. Remember that you have the right to dispute a debt, and that when you send a dispute letter, it’s up to the debt collection agency to prove that the debt is yours to pay. Until they do, they’re not allowed to contact you.
Allied Interstate Why Do They Have Rip Off Reports Against Them
Allied Interstate is a collection agency that is engaged in debt collection, offers financial services to government agencies and takes care of accounts receivable management. It operates in United States and has branches in few other countries. It is in business for several years. The Better Business Bureau (BBB) has given it “F” ranking. BBB explains that the rating is due to the discrepancies that exist in their mode of operation.
Let us find out why Allied Interstate has become popular for the wrong reasons. Listed below are few of them.
- The company urges consumers not to maintain any document related to debt collection and prefer entering into verbal agreement instead.
- They ill treat the debtors and use abusive language
- There are instances when the company officials harass debtors to settle debts that were past the SOL or Statute of Limitations by re-aging the account
- They trouble debtors by calling them up at any time of the day.
- Most of their advertisements mislead consumers
- They try to get details of your bank account and ask you for your Social Security Number
- Sometimes they may call your place of work too
- Threaten debtors to file lawsuit etc
The factors mentioned above have made them so unpopular among debtors.
How will you deal with Allied Interstate?
If you find that your mailbox has flooded with mails from this company urging you to pay up for a debt that you owe, there is no need to panic. There are rights that can protect consumers and you can make use of the same. First of all, validate your debt. If it is found that you owe some money, it is better to pay off. If on debt validation, it is found that you don’t owe any cash, communicate the same to the collection agency. Finally, if nothing seems to work, register a complaint with the Attorney General of the state in which you live.
