California-based debt collector pays $1 million dollars to settle Federal Trade Commission charges that the defendants violated federal law.
The FTC, the nation’s client protection agency, alleged that Archie Donovan and two companies he controls – National Attorney Services LLC, and National Attorney Collection Services, Inc. used English- and Spanish-language SMS and phone calls during which they unlawfully didn't disclose that they were debt collectors. The FTC charged the defendants with violating both the FTC Act and the Fair Debt Collection Practices Act.
In their text messages, phone calls, and mailings, the defendants additionally incorrectly pictured themselves as law companies – by using the names Abogados Nacionales, National Attorney Service, National Attorney, and National Attorney Services.
Building on their deceptive name, the defendants incorrectly threatened to sue clients for not paying their debts or to garnish their wages.
The FTC also alleged that Donovan and his firms illegally revealed debts to the clients’ family members, friends and associates.
Among alternative ways, the defendants used mailing envelopes picturing a large arm shaking money from a consumer who is strung upside down.
The law does not enable debt collectors to disclose in public someone’s private debts, because doing therefore might endanger their jobs and reputations. Mailing envelopes will embody solely only the name and address of the company, and can't indicate that the consumer may owe a debt.
In addition to the $1 million civil penalty, the settlement needs the defendants to prevent sending text messages that do not include the disclosures needed by law, and to obtain a consumer’s specific consent before contacting them by text message. The defendants are also barred from incorrectly claiming to be law companies, and from incorrectly threatening to sue or take any action – like seizure of property or garnishment – that they do not actually intend to take.