WASHINGTON (Legal Newsline) — The Federal Trade Commission (FTC)
announced Feb. 14 that debt collector GC Services will pay $700,000 after
allegations of using unlawful tactics to collect federal student loans.
GC Services has also been banned from violating the Fair
Debt Collection Practices Act in the future.
The company is a third party debt collector of defaulted
federal student loans and other debt. It allegedly allowed its collectors to
leave phone messages that that illegally disclosed purported debts to others
without their permission.
The FTC voted 3-0 to authorize the staff to refer the civil
penalty complaint to the Department of Justice and to approve the stipulated
final order. The complaint was filed in the U.S. District Court for the
Southern District of Texas.
The FTC noted that student loan debt is a major growing
segment of the U.S. debt collection industry. It estimates that more than 40
million consumers currently deal with student loan debts. The average consumer
has $29,000 in student loans to pay off.