FTC Settlement is Largest Ever for a Debt Collection Agency

West Asset Management has agreed to pay $2.8 million, the largest civil penalty ever won by the FTC in a debt collection case, to settle charges that it violated the FDCPA when collecting debt from consumers.

West Asset Management employs over 1,500 collectors and manages collections on over 20 million delinquent accounts. The FTC alleged that West Asset Management, Inc. violated the FTC Act and Fair Debt Collection Practices Act when collecting debts from consumers. It would be easy to simply dismiss this as an example of a bad collection agency, but this is a major collection agency that is part of all the major trade organizations and the Federal Trade Commission continues to report more complaints about debt collectors than any other single industry.

Here are some of the FTC’s complaints against West Asset Management, all of which violated federal law:

• Calling consumers multiple times per day, sometimes regarding debts they did not owe
• Using abusive or rude language over the phone
• Telling friends and relatives about consumers’ debts
• Contacting consumers after receiving written notification to cease and desist contact
• Withdrawing funds from consumers’ bank accounts or charging their credit cards without proper permission
• Falsely telling consumers that they could be sued, arrested or even have their property seized if they didn’t pay the alleged debt

The $2.8 million civil penalty is the largest civil penalty the FTC has ever gotten in a debt collection industry case. Perhaps the fine will send a significant message to the industry about the importance of abiding by federal laws when collecting on debts, but it most certainly will not be much solace for individual debtors harmed by West Asset Managements unfair debt collection tactics.

This is a disgraceful list of accusations against a supposedly reputable agency. West reports on it’s website that it:

ranks as one of the nation’s top accounts receivable management companies and is the vendor of choice for the largest healthcare system in the United States, seven of the top 10 credit card issuers, and other Fortune 500 companies

West is also a member of the ACA International, which supposedly holds its members to high standards. It will be interesting to see if ACA continues to accept West’s dues. It certainly makes you question the legitimacy of the entire debt collection industry when you hear about these types of actions and a company paying record fines to make the problem go away.

Consumers who believe West Asset Management broke the law in attempting to collect debts from them should consider consulting a consumer law attorney. Under the FDCPA they may be entitled to damages as well as attorney fees.

Tags: Collection Agencies, FDCPA, Federal Trade Commission, West Asset Management