NCO Group to Pay Texas $250,000 in Collection Settlement

Texas Attorney General Greg Abbott announced Friday that his office had reached a settlement with accounts receivable management giant NCO Group in an enforcement action targeted at NCO’s work on behalf of its debt buying unit, NCO Portfolio Management.

Horsham, Pa.-based NCO agreed to pay $100,000 to the state’s general revenue fund and $150,000 to the state’s attorney general’s office to cover legal fees incurred in the investigation. Under the settlement, NCO admitted no wrongdoing.

Abbott’s office said in a press release that NCO violated the Texas Debt Collection Act by making “harassing and sometimes profanity-laden telephone calls to Texans” and not verifying the validity of the debt when challenged by consumers.

“Today’s agreement protects Texans from unlawful debt collection practices,” Abbott said. “Texas law prohibits collection agencies from using unlawful threats and coercion to collect debts. With today’s agreement, the world’s largest debt collector agreed to implement safeguards that will protect debtors and ensure full compliance with the law.”

NCO said in a statement that it would spend $300,000 over the next three years on compliance programs. The company said it would spend the money on “technology designed to further strengthen its communication with consumers and to assist consumers in resolving disputes that arise from time to time in the collection process.”

NCO will also establish a $150,000 restitution fund.

Michael J Barrist, NCO Chairman and CEO, commented in the statement, “NCO is proud of its record on consumer compliance. We are pleased to be able to resolve Texas's concerns within a framework that will allow us to improve our consumer interaction not only in Texas but within all of our markets. As the largest provider of accounts receivable collection services in the world, we truly believe that our new initiatives will set the standard for the entire industry.”