NCO Settles Debt Collection Action with 19 States

  • Email
  • Print
  • Printing Articles

    1. Click here to print!
    2. ...or print directly from your browser by choosing File > Print... from the menu or by pressing [Ctrl + P]. Our printer-friendly stylesheet will make sure extraneous website stuff isn't printed.
    3. You're done!

    Close this message.

  • Comments
  • RSS

Ohio Attorney General Mike DeWine announced today that his office lead a settlement between NCO Financial Systems and 19 states which will see NCO pay up to $1.5 million in restitution to the AG offices and consumers in the states.

DeWine said that since 2008 his office had been working with the AGs of 18 other states on the investigation into NCO’s debt collection practices. The announcement did not carry specific allegations of wrongdoing, but laid out criteria for consumers to receive compensation.

“We believe this is a fair settlement that will help uphold consumers’ rights under the Fair Debt Collection Practices Act,” DeWine said. “NCO is agreeing to provide restitution for eligible consumers, to provide stronger notifications to credit reporting agencies and consumers, and to implement policies to ensure compliance with federal and state law.”

In signing the settlement, NCO agreed to take certain steps to comply with existing laws, including additional training and the continued monitoring of its agents. The company did not admit to any wrongdoing in the settlement.

“NCO is proud of its record on consumer compliance,” said Ronald Rittenmeyer, NCO’s CEO. “We are pleased to resolve the Multi-State Group’s concerns, as well as upgrade our compliance processes, all which will permit us to improve our consumer interaction. As the largest provider of accounts receivable collection services in the world, we will continue to set the highest standards of compliance for the industry.”

The agreement calls for NCO to pay $575,000 to the states to reimburse for the cost of the investigation. In addition, the company will set aside $50,000 per state – a total of $950,000 – to compensate consumers that can show they wrongly paid NCO.

Consumer restitution will be available for three years following the effective date of the agreements for consumers who have valid claims that meet one of the following criteria:

  • Consumer paid NCO a third party debt that the consumer did not owe;
  • Consumer overpaid interest on a third party debt that was not supported by the underlying agreement between the debtor and the original holder of the debt or as otherwise permitted by law; or
  • Consumer paid more on a third party debt than the amount NCO agreed to settle the account.

Joining Ohio in the multi-state working group were the following states: Alaska, Arkansas, Idaho, Illinois, Iowa, Kentucky, Louisiana, Michigan, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, Vermont, and Wisconsin.

You might be interested in these related resources from our Research Library

  • Email
  • Print
  • Printing Articles

    1. Click here to print!
    2. ...or print directly from your browser by choosing File > Print... from the menu or by pressing [Ctrl + P]. Our printer-friendly stylesheet will make sure extraneous website stuff isn't printed.
    3. You're done!

    Close this message.

  • Comments
  • RSS

Posted in Collection Laws and Regulations, FDCPA, Featured Post .

Continuing the Discussion

We welcome and encourage readers to comment and engage in substantive exchanges over topics on insideARM.com. Users must always follow our Terms of Use. Also know that your comment will be deleted if you: use profanity, engage in any kind of hate speech, post an incoherent or irrelevant thought, make a point of targeting anyone, or do anything else we find unsavory. Your comment will be posted under your current Display Name, shown below. If you'd like to change your Display Name, you must update it on the My Profile page.

  • avatar Ameripay says:

    Another shakedown. Glad to see our taxes keeping the extortionists in office. Too bad the tobacco companies finally put a muzzle on these greedy dogs.

  • avatar Will Everly says:

    Shakedown? Clearly you have not seen Amex account after NCO has offered settlements, collected the settlement payments and then to find that Amex placed the account with the next collector or law firm in line absent of any settlement records.

    That being said, lets not forget NCO’s 20 year old Airtouch accounts which NCO itself owned as the result of merger with NCOP and CreditTrust.

    This on top of the guidelines on Out of Statute debt is good for the industry and helps it be self-policing.

  • avatar Craig Klein says:

    Just another case of one of the industry bullies giving the industry a bad name.

  • avatar Craig Klein says:

    I will say this, most of these elected “watchdogs” will not be happy until they destroy the entire industry. This case eminated from a motivation that is plain to see. My agency was put through the paces and ultimately we were able to convince them we do things the right way. As an example…..we had 36 complaints in a 42 month period in which during that time we had made 31,000,000 written and verbal contacts. Do the math….a decimal and a bunch of zeros will get you a rate of complaints. The vast majority of them were we had contacted the wrong John Doe. This ‘investigation” cost us thousands of dollars and a month of my time. Again, the motivation is obvious……Put the competition out of business.

  • avatar Delaine Smith says:

    Too bad for NCO !
    “as Beretta said on the TV show…”if ya can’t do tha time, don’t do the crime ” !!

    Now comes the doctrine of “Vicarious Liability”, which holds that a company is liable for the actions of the company as well as the actions of their employees, while holding the employees personally liable for their personal actions while in the course of their employment.

  • avatar BHA LLC says:

    1.5 million…thats not small.
    I hope they changed their ways

  • avatar Collection Veteran Since 1964 says:

    I do not think any professional in this business likes to see this situation and others like it, including the FTC. The amounts paid out are staggering but preventive if investment in training, education, compliance and even internal stress tests are placed on the top priority list. Like it or not the mortgage industry has placed clouds over the collection industry and unless status quo is not changed, then a storm, whether small or large, will become normal media communication for those who oversee the industry, plus consumer advocates. It starts with a credit issuer or lender and documentation. I see more of de-commissioning charge off system data and information with a sole reliance of the ‘system of record’. Until this changes, problems are not going away and whatever inventory exists today, maybe a due diligence is needed on what is on hand and what needs to be added soon. When payouts of this and other lawsuits are shown, and if a small fraction of the payout was spent on training and improving core compentencies at all levels that cost would be much lower and had been well spent before the lawsuit rather than being mandated and reviewed going forward. Time to get off status quo and change. While lawsuits will not go away, internal procedures and policies that are sound and consistent will help when defense is needed. To those who know their ok, get better. To those who don’t know eitherway, change.

Leave a Reply