Glendale-Based Debt Collector Fined $1M for Violating the FDCPA
A Glendale, California-based debt collector will pay $1 million dollars to settle Federal Trade Commission charges that the defendants violated federal law. This is the first FTC action against a debt collector who used text messaging to attempt to collect debts in an unlawful manner.
The FTC, the nation’s consumer protection agency, alleged that Archie Donovan and two companies he controls – National Attorney Collection Services, Inc., and National Attorney Services LLC used English- and Spanish-language text messages and phone calls in which they unlawfully failed to disclose that they were debt collectors. The FTC charged the defendants with violating both the Fair Debt Collection Practices Act and the FTC Act.
In their text messages, phone calls, and mailings, the defendants also falsely portrayed themselves as law firms – by using the names National Attorney Services, National Attorney Service, National Attorney, and Abogados Nacionales. Building on their deceptive company name, the defendants falsely threatened to sue consumers for not paying their debts or to garnish their wages.
Envelope showing a large arm shaking money from a consumer who is strung upside down.
Example of envelope allegedly used by defendants to contact consumers’ family members, friends and co-workers about their debts.
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 does not allow debt collectors to disclose publicly someone’s private debts, because doing so could endanger their jobs and reputations. Mailing envelopes can include only the name and address of the company, and cannot indicate that the consumer may owe a debt.
“No matter how debt collectors communicate with consumers – by mail, by phone, by text or some other way – they have to follow the law,” said Jessica Rich, director of the FTC’s BCP. “The FTC has a zero tolerance policy for deception.”