Minnesota Dept. of Commerce Suspends Collection Agency’s License
A collection agency in Minnesota had its license suspended by authorities there after allegedly withholding client money collected.
The Minnesota Department of Commerce Thursday said that it had temporarily suspended the collection agency license of Bloomington, Minn.-based International Collection Services (ICS) for allegedly withholding clients’ money that it had collected.
In a press release, the Commerce office said that ICS had failed to remit its clients’ money within 30 days of collection, as required by state law. The Department of Commerce alleged that ICS used the cash to fund operations.
"Consumers have an expectation that when a collection agency collects your money to pay a bill, they actually pay the creditor on your behalf, not spend the money on their own bills," said Minnesota Commerce Commissioner Glenn Wilson in a press release. "When a breech of trust like this occurs, we suspend the license and shut down the agency."
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Commerce said that it executed a search warrant with the Bloomington Police Department Tuesday to obtain financial records at the ICS office. Authorities claim that a search warrant was necessary because ICS refused to grant access to its records, another violation of state law.
Attempts to contact ICS were unsuccessful.
The department said it received complaints from two out-of-state clients of ICS alleging they had not received money owed to them after ICS had collected on accounts due. Based on the complaints, investigators conducted an audit of the company's trust accounts and allege that ICS has misappropriated over $125,000 from clients within the past three years.
The company allegedly used the money to pay for operating expenses.
A hearing is scheduled for June 29 to consider making the license suspension permanent.
Editor's Note: ICS is not affiliated in any way with major ARM firm I.C. System, Inc., headquartered in St. Paul, Minn.
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Comments
Comment from Anonymous on June 12, 2009 at 10:53AM EST
More clients need to start speaking up about not being paid on time or at all and file and complaint with their State's OAG office
Comment from creditleader on June 12, 2009 at 10:55AM EST
Oh like this is new... Clients need to realize that this exact thing happens with so many agencies and start filing a complaint when they don't receive their funds. How about holding an agency responsible for his part of the relationship or better yet the contractual agreement.
Comment from Amused on June 12, 2009 at 11:41AM EST
Wow I never expected this from an "International" operation.
Comment from Christopher Coelho on June 12, 2009 at 11:58AM EST
Yes, you have to give the clients their money.
Of course, they don't have to give you yours, and they frequently don't. Is that a breach of trust? Yeah, sure. But what are you going to do? Fire them? Sue them, and thus write your own death warrant in the business?
No, you're going to take it lying down. They get to keep your money. No other choice.
Friends, collections is a rough business. It's one big argument about money.
But was the state right to shut them down? Sadly... yes.
Comment from DONALD DALY on June 12, 2009 at 11:58AM EST
It is sad that an agency can't cut expenses, make adjustments to operating procedures or lower officer compensation when the going get tough. This industry needs the intervention of more authorities who have the power to shut them down. Many in this industry complain about the "over-regulation" and new laws, when the outlaw agencies within our numbers are the root of the problem. The sooner they are identified and weeded out the better!
Comment from Anonymous on June 12, 2009 at 2:46PM EST
Why doesn't the Minnesota Attorney General investigate the Flat fee agency that has a few offices in Minnesota. There agents are said to be independent and that's the way they hire them but the IRS ruled on more than one occasion they are employees not independent. Why doesn't the Attorney General not go after them for not with holding state, federal, and FICA? Talk about penalties and back taxes owed? How about shutting them down?????? Any idea who this company maybe? Why can they operate and collect Minnesota money from citizens and they don't do things right themselves?????
Comment from Don on June 13, 2009 at 9:56AM EST
Clients need to establish higher standards for outsourcing to Collecton Agencies. Establish milestones in contract and if it is not met, then fire the agency.
Comment from DONALD DALY on June 14, 2009 at 12:46PM EST
TO ANONYMOUS 6/12, IF YOU GAVE THE A.G. THE DETAILS MAYBE THEY WOULD. NOTHING WRONG WITH THE INDUSTRY HELPING THE AUTHORITIES IF THEY CAN.