Debt collection agency, Allied Interstate Inc., has agreed to a $1.75 million settlement with the Federal Trade Commission (FTC), following allegations that Allied Interstate violated the Fair Debt Collections Practices Act (FDCPA) by trying to collect debts from people who did not owe the debts.
The FTC also alleged that Allied Interstate made a practice of speaking to neighbors, co-workers and family members about consumers’ debts, even though the debt was not owed by the consumers. On a side note, even if they consumer had owed the debt, the debt collectors may not discuss the debts with 3rd parties (family, friends, neighbors, co-workers). The FTC said Allied deceived consumers by threatening legal action it didn’t intend to take. Both practices are illegal, according to the FDCPA.
FTC officials said the action against Allied reflects a strategic shift in enforcement. A few years ago, the agency began to focus on larger debt collectors engaged in illegal practices. By cracking down on the bigger debt collectors, the agency hopes to send a message to smaller debt collectors who engage in the same behavior.
Last year, the FTC received 88,190 complaints about third-party debt collectors, up from 78,925 a year earlier. Approximately, half of the complaints involved allegations that collectors harassed people by calling repeatedly, the FTC said in an annual report to Congress.
One such complaints stems from the case of Wallace Milow vs Allied, in this case Milow alleges that Allied collectors called him repeatedly demanding he pay his son’s $10,000 credit card debt. When Milow refused, Allied allegedly threatened to have his son arrested with bail set at $12,000.
Milow alleged that Allied kept calling him even after he told the firm that he could not pay his son’s debt and asked Allied to stop contacting him.
If you are being harassed by debt collectors in violation of the FDCPA, you may be entitled to compensation. Please call California Consumer Protection Attorney, Todd M. Friedman at (877) 206-4741 for a free consultation.