In its role as the enforcer, the Federal Trade Commission (FTC) entered into a consent decreewith Asset Acceptance, LLC, in which the company agreed to accept a $2.5 million civil penalty for various violations of the Fair Debt Collection Practices Act (FDCPA) and Fair Credit Reporting Act (FCRA).
One of Our Nation’s Largest Debt Buyers
As the FTC pointed out, Asset Acceptance (based in Michigan) is one of the nation’s largest consumer debt buyers and its illegal practices caused a great deal of harm to the public. The company was engaged in the regular practice of making misrepresentations to consumers in an effort to collect on old debts. Some debts were legally unenforceable, long past the statute of limitations period for collections. According to the FTC Bureau of Consumer Protection’s Director, David Vladeck:
“Most consumers do not know their legal rights with respect to collection of old debts past the statute of limitations. When a collector tells a consumer that she owes money and demands payment, it may create the misleading impression that the collector can sue the consumer in court to collect that debt. This FTC settlement [with Asset Acceptance] signals that, even with old debt, the prohibitions against deceptive and unfair collection methods apply.”
9 Charges Lodged Against Asset Acceptance
In its complaint, the FTC lodged the following nine counts against Asset Acceptance:
1. Misrepresenting to consumers that they owed a debt when, in fact, Asset Acceptance could not substantiate its representations.
2. Failing to disclose to consumers that the debts it was collecting on were too old to be legally enforceable. And also failing to disclose to consumers that, by making a partial payment on the debt, the consumer would actually revive the obligation and extend the time frame within which such debt could be legally enforceable.
3. Providing negative information to credit reporting agencies when Asset Acceptance knew or had reasonable cause to believe that the information it was providing was not correct or accurate.
4. Failing to provide written notice to consumers that Asset Acceptance had provided negative information to a credit reporting agency.
5. Failing to conduct a reasonable investigation when Asset Acceptance received notice from a credit reporting agency that the consumer disputed the negative report.
6. Asset Acceptance repeatedly called third parties who did not owe any debt.
7. Asset Acceptance also repeatedly informed third parties about the existence of consumers’ debts.
8. Asset Acceptance routinely employed illegal debt-collection practices. It misrepresented the character, amount, and legal status of debts. It provided incorrect or inaccurate information to the credit reporting agencies. And it made false representations for the purpose of collecting debts.
9. Lastly, Asset Acceptance failed to provide verification of debts as required by law following any consumer’s dispute about the debt. Instead of providing verifications, the company continued with its collection efforts.
All of these charges indicate Asset Acceptance’s blatant disregard for the consumer protections making up the heart of the FDCPA and FDRA.
FTC Balances the Playing Field for Consumers
As part of the consent decree, and among other things, Asset Acceptance agreed to investigate any consumer dispute as to whether there is a reasonable basis for a claim that the consumer owes the debt. The investigation must be completed before Asset Acceptance may continue with its collection efforts. Furthermore, Asset Acceptance must notify consumers of any negative debt report that it places on the consumer’s credit report.
In addition to the $2.5 million civil penalty, Asset Acceptance is enjoined, or prohibited, from further violations of the FDCPA and FCRA, including:
“A. Making any material misrepresentation, expressly or by implication, to collect or to attempt to collect a debt or to obtain information concerning a consumer; and
B. Making any material representation, expressly or by implication, that a consumer owes a debt or as to the amount of a debt, unless, at the time of making the representation, Defendant has a reasonable basis for making such representation.”
That should give you some insight into the extent of Asset Acceptance’s routine of unlawful practices when the FTC caught up with it. The FTC has indicted that it will not let up its enforcement efforts and will continue going after debt collectors believed to be in violation of the FDCPA and FCRA consumer protection laws.