Cordray, debt collector settle

Nick Rees Apr. 14, 2010, 10:25am

CLEVELAND (Legal Newsline) - Ohio Attorney General Richard Cordray has secured $207,500 in consumer restitution in a settlement with a collection agency, resolving allegations of consumer harassment when collecting debt.

National Enterprise Systems, Inc., will also pay a comparable amount to the state's Consumer Protection Enforcement Fund. The company has also agreed to change its debt collection practices.

"Our lawsuit outlined a laundry list of clear violations of consumers' rights," Cordray said.

"With today's settlement, not only will consumers receive restitution but the company will implement new policies and procedures to prevent this from happening again. Ohioans deserve a fighting chance to pay back debt without being demeaned, deceived or harassed."

Cordray's lawsuit, filed in July, charged NES with violating Ohio's Consumer Sales Practices Act and the federal Fair Debt Collection Practices Act through its business practices. Among Cordray's list of complaints were alleged calls and harassment of consumers' coworkers and family members, calls placed before 8 a.m. or after 9 p.m., abusive language, attempts to collect debts consumers did not owe, failure to verify debts and unauthorized withdrawals from consumers' bank accounts.

More than 390 complaints were filed with Cordray's office against NES.

NES, in addition to providing restitution, has agreed to train its employees on compliance with applicable state and federal law.

NES has also agreed to send written communication within five days of first contact with a consumer that includes the amount of debt, the name of the creditor, a notice that the consumer has 30 days to dispute debt, how to dispute the debt and how to ask for validation of the debt.

Debt settlement agreements, under terms of the settlement, are required to include the total amount due, the settlement amount, the monthly payment amount and approval of the creditor.

A disclosure will now be added by NES on all written collection communication as well, stating that Ohio law requires consumers be given fair treatment and informing consumer that they may write a letter to prevent a debt collector from contacting them. Communication from NES will also provide the contact information for the Ohio attorney general's office for consumers to file concerns.

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