Minnesota collection agency Allied Interstate Inc. agrees to pay $1.75 million to settle FTC lawsuit

The Federal Trade Commission, the federal agency tasked with enforcement of the FDCPA and other consumer protection laws, filed a lawsuit yesterday against Allied Interstate Inc., one of Minnesota’s largest collection agencies. The lawsuit alleged a number of FDCPA violations, including:

  • contacting people after being told by these people that they did not owe the debt;
  • making illegal collection calls to parties other than account debtors;
  • placing multiple collection calls over a short period of time;
  • using abusive language during collection calls;
  • revealing the existence of a consumer’s debt to third parties;
  • threatening to sue consumers without any intention of actually doing so.

If true, these allegations show that Allied repeatedly violated virtually every important consumer right under the FDCPA.

Also yesterday, the FTC announced that Allied had already agreed to pay $1.75 million to settle the lawsuit. According to the Minneapolis Star Tribune, it’s the second largest civil penalty the FTC has obtained from a collection agency in a debt collection case. In a press release, an FTC spokesperson focused on Allied’s alleged attempts to collect debts from people that didn’t owe them. “Debt collectors had better make sure their information is accurate, or they could end up paying a big penalty,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection. “There is no excuse for trying to collect debt from someone if you can’t confirm that they actually owe it.”

Minnesota debt collector to pay $1.75 million to settle harassment charge | Star Tribune | October 21, 2010
FTC Press Release here.
PDF version of the FTC’s lawsuit here.