You know times are tough when even the US government is being sued for abusive debt collection practices, reports InsideARM. The U.S. government has agreed to settle a class action lawsuit brought by military vets for $7.4 million.
The issue was the government’s practice of “administrative offset,” or intercepting federal payments, such as income tax refunds and social security, to pay debts owed to the US. The vets alleged that the government miscalculated fees and interest, failed to send proper notice, and used the “offset” to collect debts that were beyond the statute of limitations. Over 6,700 vets will receive $10,000 each as part of the settlement.
A Texas attorney obtained a $150,000 Judgment on behalf of his client, an individual who had been contacted numerous times by a debt collector. A unanimous jury found that the defendant, First National Collection Bureau, Inc., a debt collector, had knowingly and willfully violated provisions of the Federal Telephone Consumer Protection Act (the ”FTCPA”). The FTCPA generally prohibits calls to cellular phones or using a prerecorded voice and/or an automatic telephone dialing system, without obtaining the prior express consent of the person called.
The Judgment will likely be appealed by First National, but this verdict could represent a potential step forward for consumers who have been harassed by debt collectors.
