Applied Card, FTC Settlement Finalized

Federal trade commissioners last week finalized a deal with Applied Card Systems that bars the company from engaging in illegal activities, many of which are alleged in a controversial lawsuit filed by West Virginia Attorney General Darrell McGraw.

The agreement was completed in late August but was finalized last week after allowing the public time to comment. The pact isn?t an admission of guilt, but the Delaware-based company agreed not to conduct some debt-collection practices ? including harassing third parties and threatening illegal action.

?It?s significant because it includes the things we and other states have alleged,? said Norman Googel, assistant attorney general. New York, Pennsylvania, Wisconsin and Texas also sued Applied Card, he said.

On Friday ? the same day the FTC posted online notice of the agreement with Applied Card ? about half of the company?s 600-member Huntington work force protested McGraw as he and Republican attorney general candidate Hiram Lewis IV met with Gazette editors at the newspaper?s office.

Company leaders have said that they will close the Huntington office in 2005 because of the lawsuit. McGraw?s office first got wind that the company might be violating state law last year after Applied Card closed its operations in Beckley and Ashland, Ky.

At that time, about 40 former Applied Card workers told McGraw?s office that the company ?was engaging in serious debt collection abuse of hundreds of thousands of customers across the nation and in West Virginia,? according to McGraw?s office. ?These employees alleged that the unlawful practices were condoned by upper management, encouraged, and rewarded through bonuses and other incentives.?

According to the FTC, Applied Card representatives called ?third parties, including relatives, neighbors, and employers, attempting to get information about where consumers live or work in order to contact them about a delinquent debt.? Applied Card also continued ?to call these third parties, even after they have told the representatives that the consumer they are looking for does not reside or work with them.

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