Debt Collector to Pay $240,000 Penalty: United Recovery

[David A. Szwak]

Debt Collector to Pay $240,000 Penalty

WASHINGTON, April 17, 2002 -- Houston-based United Recovery Systems, Inc. (URS) has agreed to pay a $240,000 civil penalty to resolve allegations that the company violated the Fair Debt Collection Practices Act (FDCPA).

The Federal Trade Commission said it was its first enforcement action against a debt collection company for allegedly violating the rights of Spanish-speaking consumers.

"Spanish-speaking consumers are a growing and vital part of America's economy. They deserve the same strong protection from abuse as other members of our society," said J. Howard Beales, III, Director of the FTC's Bureau of Consumer Protection. "Regardless of the language they speak, the FTC will protect the rights of all consumers."

According to the FTC's complaint, the company's debt collectors communicated with consumers at improper times or places, engaged in prohibited communications with third parties, harassed and abused consumers, and used deceptive practices to collect consumer accounts.

In addition to the civil penalty, the proposed consent decree to settle the FTC charges includes broad prohibitions on future FDCPA violations and would require URS to inform consumers in writing that they may stop the company from contacting them about the debt and may contact a special URS phone number or address should they have a complaint about the way URS is collecting the debt.

The settlement also includes a comprehensive consumer complaint and resolution program under which every consumer complaint about URS collection practices must be thoroughly investigated and responded to by the company.

In effect since March 1978, the FDCPA prohibits abusive, deceptive and unfair debt collection practices. For example, in an effort to collect a debt, a collector may not discuss the debt with anyone other than the consumer and certain other persons, such as the consumer's attorney or spouse. In addition, under the FDCPA, collectors may not make false statements, use obscene or abusive language, threaten to take legal action they cannot or do not intend to take, call consumers at work if they know it is inconvenient or not permitted by the employer, or call consumers at other times they know to be inconvenient to the consumer, such as before 8:00 a.m. or after 9:00 p.m.