The Federal Trade Commission announced Tuesday that it has reached a settlement agreement with NCO Group that calls for the company to pay a civil penalty of $3.2 million and revise some of its debt collection practices. The government said in a press release that the penalty is the largest it has ever obtained against a third-party debt collector.

The FTC alleged in a broad complaint various violations of the Fair Debt Collection Practices Act (FDCPA) and the FTC Act. The Commission pointed to alleged tactics such as calling consumers multiple times per day, calling even after being asked to stop, calling early in the morning or late at night, calling consumers’ workplaces despite knowing that the employers prohibited such calls, and leaving phone messages that disclosed the debtor’s name, and the existence of the debt, to third parties.

NCO Group, in a statement provided to insideARM.com, said of the announcement:

“We are pleased to have resolved this matter with the Federal Trade Commission (FTC) and to have this legacy issue, dating back to 2008, behind us. We cooperated fully with the FTC’s 2010 investigation and have already implemented systems and procedures to help address their areas of concern. We believe that the quality of our consumer interaction is best-in-class in our industry, and have worked hard over the past several years to ensure compliance and fair treatment of consumers on all of our points of contact.  As a leader in the industry, we look forward to continuing to work with the regulatory agencies on important matters of compliance and quality, and value the role these agencies play in the collections industry.”

NCO Group is generally considered the largest debt collection company in the world. The FTC noted that the company employs some 32,000 people globally and had revenues of $1.2 billion in 2011.

Under the proposed order, whenever a consumer disputes the validity or the amount of the debt, NCO must either close the account and end collection efforts, or suspend collection until they have conducted a reasonable investigation and verified that their information about the debt is accurate and complete.  The proposed order also restricts situations in which the company can leave voicemails that disclose the alleged debtor’s name and the fact that he or she may owe a debt.

NCO will also be required to record at least 75 percent of all their debt collection calls beginning one year after the date of the order, and retain the recordings for 90 days after they are made.


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