Debt Collector Agrees to Settlement

WASHINGTON, DC — A Houston-based company has agreed to pay $240,000 to settle allegations it lied and used other unlawful methods to collect debts from consumers, the government said.

The Federal Trade Commission said it is its first enforcement action on behalf of Spanish speakers under the 24-year-old debt collection law.

In a complaint filed Wednesday in U.S. District Court in Houston, the FTC alleged that United Recovery Systems Inc. violated federal debt collection law on numerous occasions. Communicating in English and Spanish, the company’s collectors called debtors at work, spoke with parents, children, employers and co-workers of consumers about their debt, and falsely told them that failure to pay could lead to arrest or garnisheeing of wages, the FTC alleged.

Federal law prohibits collectors from, among other things, discussing the debt with anyone other than the consumer and a few other specific people, from using foul or abusive language, from lying or threatening unintended legal action, and from calling at work during inconvenient times or during early-morning or late-night hours.

“Regardless of the language they speak, the FTC will protect the rights of all consumers,” said J. Howard Beales, director of the FTC’s consumer protection division.

The proposed consent decree also was filed with the court Wednesday and must gain its approval.

It includes the civil penalty as well as a requirement that URS inform consumers in writing that they can stop the company from contacting them about the debt and can call a special number with complaints. The settlement also contains several reporting and record-keeping requirements and sets up a consumer complaint program through which the company must thoroughly investigate and respond to every complaint about its practices, the FTC said.