NCO Financial Systems (a.k.a. NCO Group or NCO Financial Services), has been one of the largest debt collectors and accounts receivable management firms in the world, with more than 100 locations in eleven countries. It was also heavily involved in student loan debt collection.
However, this company has changed hands several times over the past decade. The latest owner appears to be Alorica, which acquired Expert Global Solutions of which NCO Financial Systems was a subsidiary.
If you have a collection account from NCO Financial on your credit reports, it’s possible the information may be incorrect or out of date. If you are contacted by a debt collector claiming to be with NCO Financial it is possible it is a scam. So it is very important for you to understand your rights before you agree to make a payment or agree to a settlement.
Over the years there have been numerous complaints about the debt collection practices of NCO Financial Systems:
Because this collection agency has gone through several acquisitions it is impossible to find current contact information for NCO Financial Services.
If you are contacted by a collection agency claiming to be NCO Financial services insist the debt collector send you written verification of the debt. That notice must include information about how to contact the collection agency. This verification of the debt is your right under the federal Fair Debt Collection Practices Act. You have the right to this information so you can confirm whether you owe the debt, and whether the amount it says you owe is correct.
Many consumers who have been contacted about a debt with NCO Group will see “NCO Fin” or “NCO Credit Services” listed on their credit reports. In fact, the first time you learn about a collection account with this company may be when you find it listed on your credit reports.
If you have one of these accounts listed on your credit reports, you have the right to dispute the debt on your credit reports. If the collection agency does not confirm your dispute when contacted by the credit bureau, the account must be removed.
Collection accounts may only be reported on credit reports for seven years plus six months from the date you fell behind with the original creditor. Collection accounts on your credit reports will really hurt credit scores, so it’s important you try to get this resolved (and ideally removed) if possible.
Learn more about collection accounts on credit reports here.
While the current situation with NCO is confusing, keep in mind that there is a strong federal law called the federal Fair Debt Collection Practices Act (FDCPA) that protects consumers who are dealing with debt collectors. Knowing your rights will make it easier to understand your options. We recommend the following:
1. Read our free e-book Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights and be sure to keep written records about your conversations and correspondence with any debt collector.
2. You can download our free debt collector contact worksheet as a guide. You always have the right to send the collection agency a cease and desist letter to stop them from contacting you again.
3. If you think the debt collector is breaking the law, contact a law firm and get legal advice.
4. If you owe the debt but you don't have the money to pay it, we recommend you reach out to an expert who can help you determine your options, which may include debt settlement or even bankruptcy:
In 2004, the FTC announced that NCO Group Inc., one of the nation’s largest debt-collection firms, agreed to settle Federal Trade Commission charges that it violated the Fair Credit Reporting Act (FCRA) because it allegedly reported inaccurate information about debtors accounts to credit reporting agencies. The agreement assessed a $1.5 million fine, the largest civil penalty ever obtained in a FCRA case at that time.
The FTC’s complaint against NCO Group, Inc.; NCO Financial Systems, Inc.; and NCO Portfolio Management, Inc. did not accurately report the date that the original consumer account had first become delinquent before being placed for collection or written off. Debt collectors are required to report this information when they report collection accounts to the credit bureaus. Without that information, credit reporting agencies cannot remove collection accounts from consumers credit reports when required. This protection in federal law helps ensure that outdated debts – debts that are beyond this seven-year reporting period – do not appear on consumer’s credit reports. Violations of this provision of the FCRA are subject to civil penalties of $2,500 per violation.
The proposed consent decree ordered the defendants to pay civil penalties of $1.5 million and permanently barred them from reporting those inaccurate dates of delinquency to the credit bureaus. NCO was also ordered to develop a program so that consumer complaints about this issue would be corrected quickly.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.
In January 2006, Pennsylvania Attorney General Tom Corbett reached a settlement with Pennsylvania-based NCO Financial Systems Inc. The Attorney General's Bureau of Consumer Protection reported at that time that it had received more than 800 complaints against NCO Financial since November 2003.
The Attorney General's Office alleged violations of the state's Consumer Protection Law and Fair Credit Extension Uniformity Act, as well as the federal Fair Debt Collection Practices Act. These alleged violations included engaging in or using false, deceptive, or misleading representations or means in connection with the collection of debts.
Corbett said that many consumer complaints involved claims that NCO Financial improperly contacted consumers at their place of employment, or called at unusual times the company knew, or should have known, were inconvenient to the consumer (for example, calling debtors before 8 a.m. and/or after 9 p.m.)
Consumers also complained that representatives the agency used obscene or profane language and tried to threaten, annoy, abuse, or harass them. The attorney general raised allegations that the company communicated with consumers after they had been told in writing that the debt was in dispute or that they wanted the debt collector to cease contact.
NCO Financial denied the allegations while agreeing to change certain practices as well as pay the Commonwealth the sum of $300,000.