Debt cancellation coming to almost 1,500 West Virginians
Darrell McGraw (D)
CHARLESTON W.Va. (Legal Newsline) - Almost 1,5000 West Virginia consumers will see debts totaling over $6.5 million canceled following an agreement made by the state's attorney general with a debt collection agency.
"My office remains concerned about the debt purchasing industry, which typically purchases accounts for pennies on the dollar and rarely obtains any proof of the debt that would be admissible as evidence in a court," Attorney General Darrell McGraw said. "This practice is troublesome because state and federal laws require that collection agencies be able to verify a debt when disputed by consumers, an important obligation to consumers that debt purchasers can rarely meet."
Debt purchaser Financial Credit Services, based in Palatine, Ill., was found in a 2007 investigation to be collecting debts in West Virginia without a license. Financial Credit Services was also threatening to file suit and report debts to credit bureaus despite having no intention of doing so.
The attorney general of West Virginia also alleges that Financial Credit Services had no verifiable proof of the debts it was attempting to collect outside of computer spread sheets.
As part of the agreement which has Financial Credit Services canceling $6,675,474.64 in debts to 1,451 West Virginians, the company will also refund the $2,481 it had already collected.
Financial Credit Services only contacted three percent of the consumers on their list leading to the small collected total, the attorney general's office said.