Are one or more debt collectors hounding you? Have you been tempted to authorize payment of your debt over the phone?
In a recent case, the Federal Trade Commission (FTC) determined that a Houston debt collection company - RTB Enterprises, Inc., which does business as Allied Data Corporation, and Raymond T. Blair - wrongly bullied English- and Spanish-speaking consumers and charged them transaction fees.
In addition, the FTC said the bill collectors were deceptive in their methods and claimed to be speaking on behalf of attorneys. Finally, the company threatened to sue consumers and coerced unsuspecting individuals to make payments toward their debts or reveal their personal information.
The FTC sued the debt collection company to rescind their contracts, provide restitution to consumers, and to stop the company from proceeding with its tactics.
The Case Against Houston-Based Allied Data Corporation
Allied Data Corporation had been engaged in third-party debt collection since 1993. Its clients included marketing companies, retail stores, retail websites and hospitals. Annually, Allied collected on one million accounts.
The FTC noted in its complaint that the company used more abusive debt collection tactics against Spanish-speaking consumers than those whose primary language was English. For example, the company's collectors claimed to be attorneys when they attempted to seek payment from Spanish-speaking consumers.
The collectors also warned that the case, if not closed, would head next to Allied's litigation or pre-litigation departments, even though those departments didn't exist within the company.
Oftentimes, Allied's employees would tell consumers that legal proceedings had already begun against the targeted consumers. They went so far as to convey file numbers to further intimidate individuals.
Perhaps worst of all, Allied's employees would tell consumers that they needed to pay the debt right away to avoid up to thousands of dollars of court fees. Allied made these threats even though it had no intention of suing the consumers they targeted. In fact, the lawsuit noted that Allied had no authority to sue consumers without seeking approval from their creditor clients.
Debt Collector Promoted Payment Plan that Didn't Exist
As part of Allied's methods, the collectors spoke about the company's "Hard-ship Program," a program that didn't even exist. Allied's employees had to follow a script designed to entice consumers to initiate a partial payment plan. Of course, to qualify for the plan, consumers had to turn over their personal financial information.
The FTC, in describing Allied's Hard-Ship Program, quoted directly from the company's training manual:
"What is the hardship [sic] program? Anything you want it to be, SIF [Settlement in Full] offer, PPA [Partial Payment Arrangement]. Our main goal is to make the debtor believe they have been qualified for the program and the information given to us has helped them qualify. This just gives us more information [to use in collecting the debt]."
Allied's training manual encourages its employees not to accept payment by regular mail. Instead, they would only accept payment by credit or debt card over the phone, by check-by-phone, by Western Union, or by sending payment through Express or Priority Mail.
The FTC found Allied to be guilty on three counts:
- Deceptive attorney and litigation violations.
- Deceptive transaction fee and convenience fee representations.
- The use of false or misleading representations
If you need immediate debt relief, contact our lawyer by calling us at 707-623-1875 to schedule a free consultation. You can also fill out our online submission form. We offer flexible scheduling arrangements and accept all major credit cards.