Another State AG and the FTC Pile On Debt Buyer over Telecom Bills

IFC Credit Corp.’s woes aren’t limited strictly to the great state of Texas. Missouri, too, is looking to punish the collection agency for fraudulent debt collection.

Missouri Attorney General Jay Nixon believes that IFC is trying to collect more than $1 million in fraudulent debt from at least 40 Missouri small businesses and non-profits as part of an alleged telemarketing scam.  Nixon filed suit June 6. Nixon's suit is part of a larger effort by the Federal Trade Commission in its filing against IFC.

Those scammed – including yesterday’s Texans -- had been customers of a now-defunct telecommunications provider, NorVergence, which was based in New Jersey.  NorVergence’s product, rented "matrix" boxes that it claimed would integrate and provide telephone, wireless and Internet services while reducing telephone and Internet bills by 30 percent, didn’t work.  NorVergence filed for bankruptcy.

IFC, among other finance companies, purchased the rental agreements from NorVergence and claimed that NorVergence customers were still responsible for the rental agreement payments, even though the equipment did not work.  Only, according to Nixon, IFC misrepresented consumers' rights and obligations under the rental agreement – and also made false claims in its collection letters to consumers.

"These customers were first sold a bill of goods by NorVergence for a product that was supposed to meet all their telecommunications needs," Nixon said in a statement. "Now, even after NorVergence has collapsed, these finance companies are trying to make consumers pay for services they never received. We will protect Missouri small businesses and other consumers from those trying to collect fraudulent debts."