A Glendale, California-based debt
collector will
pay $1 million dollars to settle Federal Trade Commission charges that it used
text messaging to attempt to collect debts illegally.
The FTC alleged that Archie Donovan and
his two companies – National
Attorney Collection Services, Inc., and National Attorney Services LLC – used
English- and Spanish-language text messages and phone calls that illegally
failed to disclose that they were debt collectors.
In their text messages, phone calls,
and mailings, the defendants also falsely described themselves as law firms –
using the names National Attorney Services, National Attorney Service, National
Attorney, and Abogados Nacionales. Under these names, the defendants
falsely threatened to sue consumers for not paying their debts or to garnish
their wages.
The FTC also alleged that Donovan and
his companies illegally revealed debts to the consumers’ family members,
friends, and co-workers. Among other tactics, the defendants used mailing
envelopes picturing a large arm shaking money from a consumer who is strung
upside down.
The law doesn’t allow debt collectors
to disclose publicly someone’s private debts, because doing so could endanger
their jobs and reputations, the FTC said. Mailing envelopes can include
only the name and address of the company and can’t indicate that the consumer may
owe a debt.
Debt collectors can use text messages
to collect debts, but they need follow the law and protect consumers’ privacy.
In addition to the $1 million penalty,
the settlement requires the defendants to stop sending text messages that don’t
include the disclosures required by law and to obtain a consumer’s consent
before contacting them by text message.
The defendants also are barred from falsely
claiming to be law firms and from falsely threatening to sue or take any action
– such as seizure of property or garnishment – that they don’t actually intend
to take.
This is the first FTC action against a
debt collector who used text messaging to attempt to collect debts.
For consumer information about dealing
with debt collectors, see Debt
Collection.
