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FTC fines Allied Interstate collection agency for violating laws

January 15th 2013

Federal Trade Commission has imposed a fine on Allied Interstate collection agency for repeatedly violating the debt collection laws. FTC has taken this step after the collection agency has been reported of violating FDCPA (Fair Debt Collection Practices Act) and FTCA (Federal Trade Commission Act) laws time and again.

FTC fines Allied Interstate for violation of laws

It has been reported that Allied Interstate, Inc has been slapped with a fine by FTC. The Minnesota based collection agency will have to pay a fine of around $1.75 million for collecting money from wrong people, and using aggressive methods when dealing with consumers. FTC has taken this action to ensure that debt collectors check their information before attempting to collect money from the consumers. Collectors will have to pay a heavy penalty if they try to collect money from consumers without verifying their information is correct.

It is said that Allied Interstate, Inc has tried to collect money from consumers who have told the collectors they didn't owe any debt to the collection agency. The collection agency has not been able to prove the accuracy of the disputed items. The agency has made threatening collection calls to the consumers repeatedly. It has also been reported that the collection agency has used offensive or profane language when dealing with consumers.

According to FTC, Allied Interstate, Inc has contacted third parties (friends, neighbor, employer, etc.) so as to identify a consumer. The collectors have divulged debt information to third parties without the consumer's prior approval. They have also threatened to sue the consumers for non-repayment of debts. In short, they have violated both the FTCA (section 5) and FDCPA rules.

Apart from paying the the fine, Allied Interstate, Inc has to stop all the collection attempts until they have investigated and confirmed that their information (regarding any debt) is correct. If they fail to prove that the consumer owes money, then the debt can't be sold to any business. However, the debt can be sold back to the client from whom they bought the debt.

Finally, Allied Interstate, Inc is prohibited from making false statements to the consumers regarding debts, contacting and informing a third party about debt without taking prior permission of the consumer, using obscene language or harassing consumers. They are also forbidden from calling consumers at inappropriate times, threatening to seize consumer's property for non-repayment of owed money, or filing lawsuits against them.

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