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Collection Agency Settles with FTC for $225,000
A collection agency has agreed to settle FDCPA-related charges brought by the FTC for $225,000. But the initial fine was over $1 million.
A Florida-based accounts receivable management firm recently agreed to settle Federal Trade Commission (FTC) charges that its debt collection practices ran afoul of federal law.
The FTC announced Friday that it had entered into a settlement with Oxford Management Services. Under the agreement, Oxford will pay a $225,000 civil fine and must adhere to the Fair Debt Collection Practices Act (FDCPA) going forward. The collection agency is based in Ft. Pierce, Fla., and has additional offices in Florida, New York and Pennsylvania.
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In its allegations, the FTC noted that Oxford “falsely threatened that nonpayment of debt would result in garnishment of consumers’ wages, arrest, or legal action.” The Commission also said that Oxford did not adhere to time restrictions in placing collection calls, engaged in third party disclosure, and used profane or abusive language when dealing with some debtors.
After the FTC’s investigations, regulators levied a $1,060,000 civil penalty against the company, all but $225,000 of which was suspended. An attorney, Salvatore Spinelli, was also fined $1,060,000, but his entire fine was suspended due to inability to pay. The FTC did not make clear the connection, if any, between Oxford and Spinelli.
The full judgments will become due immediately if the defendants are found to have misrepresented their financial condition. The settlements also contain record-keeping and reporting provisions to allow the FTC to monitor compliance with the orders.
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Comments
Comment from DONALD DALY on July 6, 2009 at 11:29AM EST
Another case for the small agency to use in their promotion. The "BIG HOUSES" are simply to large to know or monitor daily operations, either that or they use their volume as the "EXCUSE" and get penalties reduced by 75%. I would hope the clients of these "BIG HOUSES" get upset at the fact their former customers are getting kicked around and change to locally run firms with solid reputations and policies.
Comment from www.creditservicesplus.com on July 6, 2009 at 8:28PM EST
Sad to say, but that's how most of these "big houses" pay the fines. Most of the time, they probably still come out ahead. If they collect 500,000.00 based on unethical practices, but only get fined 250,000.00, what did they lose? Not saying it's right, but its business. Just like the drug companies that produce drugs they know don't work or will kill people, but they make enough money off it, by the time they pay all the fines, they still walk away with a large "bonus".
I would rather make the money the honest way. People still deserve respect regardless of the mistakes they have made. For the most part, the FDCPA is fair and respectful. But I have said it before, and will say it again, the courts are not. They still need to stop making the debtors the victims. What about the real victims, the honest companies going out of business because they keep making it harder and harder to collect money they are owed, rightfully!
Comment from Ivassarx on July 6, 2009 at 9:33PM EST
"locally run firms with solid reputations??????????? MY GOD Donald Duck.....could you name the company you work for?
Comment from anonymiss on July 6, 2009 at 10:13PM EST
"Salvatore Spinelli, was also fined $1,060,000, but his entire fine was suspended due to inability to pay". So this is how debt collection attorneys get treated for their inability to pay? He should be given the same treatment as anybody else who can't pay their debt. Fine him and sick another collector after him and let him know what it feels like. This is outrageous to get this special treatment.
Comment from DB-Admin on August 14, 2009 at 9:42PM EST
Wow.