Texas Attorney General Greg Abbott Monday announced that his office has charged a third-party Houston debt collection firm with violating the Texas Finance Code.
First Integral Recovery, LLC is a third-party collector hired by creditors to collect outstanding, short-term payday loan payments. According to the State’s enforcement action, First Integral Recovery’s representatives unlawfully claimed that the firm is associated with law enforcement agencies. After falsely citing their purported law enforcement ties, the defendant’s staff told debtors they faced arrest, prosecution and imprisonment because of their delinquent debt.
In addition to improperly misleading debtors about First Integral Recovery’s law enforcement ties, the State’s enforcement action cited the defendant for attempting to intimidate debtors and using profanity during debt collection calls. According to state investigators, First Integral Recovery also failed to properly verify whether the alleged debtor actually owed the debt in question – even after those contacted by the firm sought additional information or insisted they did not incur the indebtedness in question.
Although Texas law requires that debt collectors identify the name of the creditor, First Integral Recovery representatives routinely refused to identify the alleged creditor on whose behalf they were calling. Finally, the firm also operated for seven months during 2010 without having posted a surety bond with the Texas Secretary of State, a legal requirement of third-party debt collectors.
The attorney general seeks and injunction and civil penalties for violations of the Finance Code and Texas Deceptive Trade Practices Act.