[hannah]

Got this from Dare over at CIR.

For Release: November 6, 2007
Nationwide Debt Collector Will Pay $1.3 Million to Settle FTC Charges

A Texas-based debt collection company will pay more than $1.3 million to settle Federal Trade Commission charges that it misled, threatened, and harassed consumers in violation of federal law.

“Debt collectors who get complaints from consumers should not only take notice, but also take action,” said Lydia B. Parnes, Director of the FTC’s Bureau of Consumer Protection. “The message from this case is clear: Either comply with the law or face stiff penalties.”

According to an FTC complaint, in many instances, collectors for LTD Financial Services, L.P., which collects on about 1.25 million consumer accounts per year, violated the FTC Act and the Fair Debt Collection Practices Act by falsely threatening or implying that LTD would garnish consumers’ wages, seize or attach their property, or initiate lawsuits or criminal actions against them if they failed to pay.

LTD collectors, who collect in English and Spanish, allegedly called consumers at their place of work despite knowing it was inconvenient for them to receive calls there, and disclosed the existence of debts to family members, employers, co-workers, and neighbors. They also allegedly harassed consumers and used abusive tactics such as immediately calling back after consumers hung up on them, and sometimes used racial slurs and profanity. According to the complaint, in some instances, front-line supervisors and mid-level managers either participated or were aware of such practices under their supervision but failed to impose sufficient discipline.

Hundreds of consumer complaints against LTD are filed with the FTC, the Houston Better Business Bureau (BBB), various state attorneys general, and the company itself, the FTC’s complaint states, noting that LTD’s response to complaints “is cavalier at best,” that complaints from attorneys general and the BBB alleging egregious law violations frequently are dismissed without significant investigation, and that collectors often go unpunished or merely receive a warning. The complaint also alleges that LTD’s internal compliance program regularly catches collectors violating federal law, but even multiple egregious violations often go without serious punishment, and that senior managers either turn a blind eye to the unlawful acts or fail to exercise the supervision necessary to recognize the problems.

Under the proposed settlement, LTD will pay a $1.375 million civil penalty. In addition, LTD and its owners, Timothy Feldman and Leonard Pruzansky, and its top managers, John Brewster and Derrek Davis, are permanently prohibited from misrepresenting to consumers that nonpayment of a debt will result in garnishment of wages, seizure or attachment of property, or lawsuits. They also are permanently barred from using false, deceptive, or misleading representations in connection with the collection of any debt, communicating with a consumer at any unusual time or place, including their place of employment, or harassing, oppressing, or abusing any person.

The settlement requires the defendants to clearly and conspicuously disclose to consumers that they may stop the company from contacting them about the debt, and to notify consumers that they may contact a special LTD physical address, e-mail address, or toll-free phone number if they have a complaint about the way the company is collecting the debt.

The Commission vote to refer the complaint and consent decree to the Department of Justice for filing was 5-0. On behalf of the FTC, the documents were filed by the Department of Justice in the U.S. District Court for the Southern District of Texas, Houston Division.

NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendants of a law violation. A consent decree is subject to court approval and has the force of law when signed by the judge.

Copies of the complaint and proposed consent decree are available from the FTC’s Web site at Federal Trade Commission - Home and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click Redirect to Secure Web Server or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click FTC Bureau of Consumer Protection - Consumer Information.

MEDIA CONTACT:
Frank Dorman
Office of Public Affairs
202-326-2674
STAFF CONTACT:
Thomas B. Carter
FTC Southwest Region, Dallas
214-979-9372

[roybean]

Good.

[hannah]

Note: John Brewster.

[Hedwig]

It's about time somebody cracked down on these guys.

[spinn]

"Under the proposed settlement, LTD will pay a $1.375 million civil penalty. In addition, LTD and its owners, Timothy Feldman and Leonard Pruzansky, and its top managers, John Brewster and Derrek Davis, are permanently prohibited from misrepresenting to consumers that nonpayment of a debt will result in garnishment of wages, seizure or attachment of property, or lawsuits. They also are permanently barred from using false, deceptive, or misleading representations in connection with the collection of any debt, communicating with a consumer at any unusual time or place, including their place of employment, or harassing, oppressing, or abusing any person."

Is that the same Derek that Jlynn used to flirt with?

And isnt it interesting how they are prohibited from violating the law......doesnt that go without saying?

[hannah]

Originally Posted by spinn

Is that the same Derek that Jlynn used to flirt with?

Perhaps I'll roam over to insidearmdotcom and ask him...

[roybean]

Originally Posted by spinn

"Under the proposed settlement, LTD will pay a $1.375 million civil penalty. In addition, LTD and its owners, Timothy Feldman and Leonard Pruzansky, and its top managers, John Brewster and Derrek Davis, are permanently prohibited from misrepresenting to consumers that nonpayment of a debt will result in garnishment of wages, seizure or attachment of property, or lawsuits. They also are permanently barred from using false, deceptive, or misleading representations in connection with the collection of any debt, communicating with a consumer at any unusual time or place, including their place of employment, or harassing, oppressing, or abusing any person."

Is that the same Derek that Jlynn used to flirt with?
And isnt it interesting how they are prohibited from violating the law......doesnt that go without saying?

Couldn't be???

[roybean]

Originally Posted by hannah

Perhaps I'll roam over to insidearmdotcom and ask him...

Go get some juice please.

[Ohio Boy]

This is certainly good news, now I hope it sends a message to the others who are doing this. Gosh, that would be about all of them wouldn't it?

[Lucy]

This is great. I filed a complaint against this place a few years ago. One of their male collectors called me one day and proceeded to use the f word with me amongst other things. Needless to say I never heard from them again after I filed complaints with my state AG, their state AG and the FTC. Finally some justice. I feel like I have won the million bucks.

[jlynn]

I'm actually disappointed. the FTC gets 1.375 mil, but nothing for the consumer. Somehow I doubt that they are tromping all over consumers via the telephone, and reporting to the CRA's with the utmost integrity.

And I did not flirt with Derek, and he is on the Left Coast.

[centex]

oh whoopee...a whole $1.3M. Yeah, that'll learn 'em...

[drivel]

Originally Posted by jlynn

I'm actually disappointed. the FTC gets 1.375 mil, but nothing for the consumer. Somehow I doubt that they are tromping all over consumers via the telephone, and reporting to the CRA's with the utmost integrity.

And I did not flirt with Derek, and he is on the Left Coast.

The consumer gets a pat on the back and a hearty "Job well done!"

Hardly nothing if you ask me.

[Lucy]

Well at least it is a step in the right direction, IMHO. Everything has to start somewhere. Look at what happened to CAMCO, there was a beginning and there was an end.

This may seem like a slap on the wrist to some but possibly it will send a message that these things will not be tolerated.

As I always say, what goes around, comes around, or as Earl likes to say...karma.

[direred]

Camco violated their consent decree, though. We can only hope LTD will do likewise.