The world’s largest collection agency, NCO Group, reported results for the full year and fourth quarter 2008 Wednesday. The results?

Horsham, Pennsylvania’s NCO Group, Inc. reported a net loss for the full year 2008 of $337.1 million. In the fourth quarter of 2008 alone, the company reported a net loss of $286.6 million.

Mike Barrist, NCO Group Chairman and CEO, said that the company had achieved its objectives for the 2008 calendar year. The company’s EBITDA (earnings before interest, taxes and depreciation) for 2008 was $95.5 million. “As we continue to navigate through 2009, we believe NCO is well positioned among its peers within each of its core markets to capitalize on all available opportunities,” said NCO CEO Mike Barrist.

NCO Group acquired OSI in early 2008 and that acquisition contributed to the record revenue of $1.51 billion in 2008. $1.22 billion of that revenue was generated by NCO’s Collection Agency business. The company noted in an SEC filing that 60 percent of the ARM unit’s revenues were generated “from the recovery of delinquent accounts receivable on a contingency fee basis.” NCO also stated in an SEC filing that they spent $126.5 million purchasing debt portfolios in 2008.

In addition to being the world’s largest debt collector, NCO is infamous for a 2004 FTC Lawsuit which it paid the largest civil fine ever for an FCRA case, $1.5 million.

Dateline NBC and Chris Hansen aired a segment on Friday night that highlighted the growing debt problem in the United States and focused specifically on debt collection agencies and their shady collection tactics.

Harvard Law Professor and Debt Expert Elizabeth Warren

This episode is a must see for anyone interested in debt and debt collection. So, if you had better things to do on Friday night than sit around and watch TV shows about debt collection, the complete episode in 6 segments is below with a summary of content of each section.

The first two sections feature profiles of debt and an interview with Harvard Law Professor Elizabeth Warren. Professor Warren says in this segment that credit card debt is a huge problem in the U.S. today and is destroying the middle class. She sites the “tricks and traps” that credit card companies use to lure consumers into debt: “Credit card companies have put the loan sharks out of business… [they] would make Tony Soprano blush.” Pretty strong words against the credit card industry, but Professor Warren has never been afraid to take credit card debt issues on head on.

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Alabama State Flag

Alabama collection lawsuits are up almost 4 times according to court documents for the U.S. District Court for North Alabama. Many of these cases are related to collection agencies collecting from the wrong person, and certain companies seem to have a very high rate of suits.

Unifund tops the list with 26 suits filed in the last 12 months in North Alabama alone. Behind them is California’s Midland Credit Management with 22 suits in the last year. Here is an excerpt from the article in the Birmingham News:

California-based collection agent Midland Credit Management was sued by a woman living in Limestone County.

The problem? The woman was getting regular phone calls from Midland Credit’s bill collectors. Among the messages left by the collectors, according to the suit: “Trash like you need to pay your bills and stop ignoring them.”

The real problem was that the woman didn’t owe $1,492 to a furniture dealer for a debt allegedly incurred in 2003. Midland Credit Management was never able to substantiate the debt with receipts or signed credit agreements or other documentation, despite repeated requests, the suit said.

A spokesman for Midland Credit’s parent company, San Diego-based Encore Capital Group, said the corporation doesn’t comment on collections lawsuits. The case, like many, was settled under confidential terms.

Of course it was settled under “confidential terms.” That’s the standard method of operation for many of these collection agencies. Consistently and systematically break the collection laws that are there to protect consumers and settle any lawsuits that come up as fast and quietly as possible. Then, the lawyers representing consumers get 75% of the settlement money. Unethical collection agencies just view these lawsuits as a cost of doing business. Until there is greater enforcement from state agencies or the FTC, consumers will continue to suffer from collection harassment, while lawyers and collection agencies reap the profits.

**Read the full Birmingham News Story**