Text-Messaging Debt Collector Slapped with $1M FTC Fine

Text-Messaging Debt Collector Slapped with $1M FTC Fine

By John Curran

A California debt collection operator that used text messages and collectors allegedly posing as attorneys has agreed to pay the federal government $1 million to settle charges it violated federal law. This is the first time the Federal Trade Commission has gone after a debt collector for using text messages to collect debt in an unlawful manner.

The FTC action said that the debt collection agencies National Attorney Collection Services Inc. and National Attorney Services LLC – both owned by Archie Donovan in Glendale, California — violated the Fair Debt Collection Practices Act (FDCPA) in a number of ways. Some of the companies’ actions could also be construed as violating the federal Telephone Consumer Protection Act (TCPA), although those charges were not brought by the FTC.

Numerous text spam lawsuits regarding TCPA violations have alleged that consumers did not sign up to receive SMS messages or continued to get them even after they opted out of programs. The FTC says that the two companies engaged in similar illegal acts, contacting debt holders on their cell phone even though consumers had not provided those numbers.

In addition, the federal agency alleged that the companies abused the privacy rights of borrowers with outstanding debts. Envelopes were printed with graphics implying that there was a collection notice, and consumers reportedly received collection calls with inaccurate information regarding the possibility of suing them or even garnishing their wages. The FDCPA requires debt collection agencies to accurately identify themselves and serve legal notice for any potential garnishments.

The FTC also alleged that employees of National Attorney Collection Services and National Attorney Services misrepresented themselves as attorneys in addition to speaking of debts illegally with family members, friends and co-workers. As a result, in addition to the fine, the settlement requires the defendants to stop sending text messages unless they obtain the consumer’s express consent before contacting them – one of the many rules enacted under the TCPA.

While the FTC settlement involves charges related to violations of the FDCPA, numerous lawsuits and class action lawsuit have been filed by consumers who were victimized by TCPA violations. Under the TCPA, a company cannot contact you on your cell phone without prior express permission, and must stop sending text messages if you opt out of them. Companies are also not allowed to contact you on your cell phone using an automated dialing machine (robocalls) or pre-recorded voice message unless you gave them permission to contact you this way.

If you were beset by robocalls or unwanted text messages, get educated. You can obtain a free case review with a TCPA lawyer at the Text Message Spam, Cell Phone Call TCPA Class Action Lawsuit Settlement Investigation by filling out the short form there. Violations of the TCPA can result in payments of up to $1,500 for each violation. Find out whether or not filing your own text spam lawsuit makes sense and get a free case eligibility review at the investigation today.

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