Debt Collector to Pay $1 Million Settlement for Unlawful Debt Collection Scheme

The Federal Trade Commission (FTC) has recently settled a case with two California-based debt collection companies for their use of predatory debt collection practices in violation of the Federal Debt Collection Practices Act (FDCPA). This settlement marks the first time the FTC has challenged a debt collector’s use of text messages as a lawful method of collecting debts owed. The FTC alleged that Archie Donovan and the two companies he controlled, National Attorney Collection Services, Inc. and National Attorney Services, LLC, were in violation of the FDCPA for sending around 1.8 million text messages as well as placing countless phone calls to consumers over the course of two years without disclosing that they were debt collectors. In addition, these defendants not only sent text messages to the consumer but also to the consumer’s friends, family, and in some cases their co-workers. Their abusive practices did not stop here, however. The defendants also sent mailing envelopes to the consumers depicting a cartoon of a large hand shaking money from the pockets of a debtor shown below. The defendants understandably chose to settle rather than going to a jury with these issues and agreed to stop these predatory practices as well as a $1 million civil penalty for their illegal acts.

Clearly, debt collection practices such as these are against the law. And just because you owe someone money does not mean you deserve to be harassed by debt collectors. Fortunately, both the federal government and the State of Texas have implemented laws that protect consumers in these situations and depending on the circumstances you may be entitled to compensation. The FDCPA is a federal act that protects the consumer from abusive practices such as these and implements the standards debt collectors are to follow in attempting to collects payment. These collectors often commit several violations either because they are not aware of these laws, or because they simply suspect that you have little to no understanding of your legal rights. If you believe you have been subjected to harassment by a debt collector, do not let them take advantage of you.