A settlement between NCO Financial Systems and 19 states will result in the company paying up to $1.5 million in restitution to the various state's AG offices and consumers.
Ohio Attorney General Mike DeWine's office said that since 2008 his office had been working with the 18 other states investigating NCO’s collection practices. The announcement did not carry specific allegations of wrongdoing.
“We believe this is a fair settlement that will help uphold consumers’ rights under the Fair Debt Collection Practices Act,” said DeWine. “NCO [Financial] is agreeing to provide restitution for eligible consumers, to provide stronger notifications to credit reporting agencies and consumers, and to implement policies to ensure compliance with federal and state law.”
Joining Ohio in the multi-state working group were the following states: Alaska, Arkansas, Idaho, Illinois, Iowa, Kentucky, Louisiana, Michigan, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, Vermont and Wisconsin.
NCO Financial, an arm of account receivables management giant NCO Group, will pay $575,000 to the states to reimburse for the cost of the investigation and will set aside $50,000 per state – or $950,000 – to compensate consumers who can show they wrongly paid NCO.
NCO did not admit to any wrongdoing in the settlement but agreed to take certain steps to comply with existing laws, including more training and the continued monitoring of its agents.
“NCO is proud of its record on consumer compliance,” said Ronald Rittenmeyer, NCO’s CEO. “We are pleased to resolve the Multi-State Group’s concerns, as well as upgrade our compliance processes, all which will permit us to improve our consumer interaction. As the largest provider of accounts receivable collection services in the world, we will continue to set the highest standards of compliance for the industry.”
Consumer restitution will be available for three years following the effective date of the agreements for consumers who have valid claims that meet one of the following criteria:
• Consumer paid NCO Financial a third party debt that the consumer did not owe;
• Consumer overpaid interest on a third party debt that was not supported by the underlying agreement between the debtor and the original holder of the debt or as otherwise permitted by law; or
• Consumer paid more on a third party debt than the amount NCO Financial agreed to settle the account.