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State and Federal Regulatory Actions (FTC, state attorneys general)
New York - In June 2009, the New York State Attorney General reached an agreement with Capital Management Services, Inc. The company has agreed to substantially reform their business practices in order to be in full compliance with the Federal Fair Debt Collection Practices Act and New York’s Debt Collection Procedures Act. According to complaints received by the Attorney General’s Office, collectors employed fraudulent tactics in an attempt to collect debts, including:
* Contacting alleged debtors without a lawful justification for doing so and even after being asked in writing to cease all communication
* Contacting consumers at their places of employment even though the collectors were aware that such contact was prohibited by the consumers’ employers
* Discussing consumers’ debts with third parties (i.e. employers, neighbors, etc.), and doing so even after the third party told the company to cease such communications
* Falsely claiming that the company was acting on behalf of an attorney and that the company or a creditor was about to commence legal action against the consumer
* Failing to respond to consumers requests for debt verification.
The company has agreed to enhance their compliance protocols and make it easier for consumers to file complaints against individual collectors. They must create a direct link on their web site to consumer complaint forms. They must also maintain an employee disciplinary history database, as well as a comprehensive database of all complaints made by consumers or third parties who were wrongly contacted by collectors.
For more information go tohttp://www.oag.state.ny.us/media_center/2009/june/june2a_09.html