Attorneys general in Ohio and West Virginia yesterday filed separate lawsuits against National Enterprise Systems Inc. (NES), a Solon, Ohio-based collection agency, for allegedly using collection methods that violate state and federal laws.
Ohio Attorney General Richard Cordray's lawsuit charges NES with numerous violations of the Ohio Consumer Sales Practices Act and the federal Fair Debt Collection Practices Act. The lawsuit asks the court to order NES to stop its abusive practices, to hold NES responsible for reimbursing consumers and to assess a civil penalty of at least $25,000 for each violation.
"More than 200 consumers filed complaints with my office saying NES used threats, harassment and deception to collect debts," Cordray said in a news release. "These practices are unacceptable and will not be tolerated."
Cordray's office said it noticed an increase in consumer complaints during the spring of 2008 against NES and launched an investigation into the company's business practices. The investigation allegedly revealed a pattern of illegal practices, such as calling and harassing consumers' coworkers and family members, calling before 8 a.m. and after 9 p.m., using abusive language, attempting to collect debts consumers did not owe, failing to verify debts and making unauthorized withdrawals from consumers' bank accounts, according to Cordray.
West Virginia Attorney General Darrell McGraw has sued NES for making threats and using improper tactics with consumers in West Virginia. These threats include allegedly telling the father of a Kanawha County woman that his daughter would be "arrested for fraud of the federal government" unless she made an immediate payment of $5,000 toward a student loan.
McGraw's complaint alleged a wide range of other unlawful conduct, including adding unlawful collection fees to tuition owed by students to West Virginia colleges and universities. The suit asks the court to order NES to cease its abusive practices, to pay civil penalties to the state, and to award restitution to consumers who were victimized.