Debt Collector to Pay $1.4M Fine
November 14, 2007
The Federal Trade Commission (FTC) reports that it has fined a Houston-based debt collection company to the tune of $1.4 million dollars. The company has agreed to pay the fine to settle charges that it illegally threatened and harassed consumers.
According to the FTC, the company, LTD Financial Services LP, deceived some customers by falsely implying that it could garnish individuals’ wages, lawfully seize their property, or file lawsuits against them. The company handles an estimated 1.2 million accounts a year.
In addition, the company also allegedly telephoned consumers at work, the FTC said. It was also alleged that the company used inappropriate language while speaking to consumers. Further, management personnel are alleged to have participated in the inappropriate behavior. All of the above are forbidden in current debt collection rules.
In its findings, the FTC reports that hundreds of complaints against the company had been filed with the FTC, the Houston Better Business Bureau as well as many state attorneys general.
LTD states that it agreed to pay the fine in order to avoid costly litigation. It should be noted that paying the fine is not an admission of guilt.
The FTC also reported that in addition to having to pay the fine, the company and its employees must stop making any false claims such as telling consumers that they have the power to garnish wages.
The settlement was filed by the Justice Department on behalf of the FTC in the U.S. District Court for the Southern District of Texas