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Attorney General J.B. Van Hollen Announces Settlement with NCO Financial Systems, Inc. to Curb Improper Debt Collection Practices
MADISON — Attorney General J.B. Van Hollen announced that Wisconsin has joined 18 other states in reaching a settlement with NCO Financial Systems, Inc., one of the country's largest debt collection companies, that will ensure that NCO's debt collection practices conform to state and federal debt collection laws.
The multi-state effort arose from numerous complaints about NCO's debt collection practices, including failing to verify disputed debts, making excessive numbers of calls to debtors, attempting to collect debts for which the statute of limitations had expired, and improperly disclosing information to third parties.
“Any company doing business in Wisconsin needs to comply with the law. I'm pleased we've been able to reach a settlement that not only reimburses Wisconsin residents who were harmed but also requires NCO to verify its compliance in the future,” Attorney General Van Hollen said.
The Wisconsin Department of Financial Institutions (DFI) has received approximately 300 complaints against NCO since 2004. After an investigation by the states' Attorneys General, NCO agreed to comply with a comprehensive set of restrictions designed to ensure that NCO's collectors comply with state and federal laws governing debt collection.
“This agreement is a great example of two state agencies collaborating to ensure that Wisconsin consumers are protected from unethical practices,” DFI Secretary Peter Bildsten said.
Under the terms of the settlement, NCO must:
- Comply with all applicable Wisconsin and federal laws governing debt collection;
- Provide consumers with notice of their legal rights related to debt collection;
- Not attempt to collect debts that are beyond Wisconsin's six-year statute of limitations;
- Cease collection efforts where NCO is unable to itemize the amounts allegedly owed;
- Notify credit reporting agencies of debts disputed by the consumer; and
- Train and monitor NCO employees and contractors to ensure compliance, and submit compliance reports to the states.
Apart from compliance with specific requirements, the settlement requires NCO to train its employees about the mandated practices, to monitor their compliance, and to report their compliance to the states. NCO also will set aside $50,000 to reimburse Wisconsin debtors who paid a debt that was not owed, who overpaid interest on a debt, or paid more than had been agreed would settle the debt.
Assistant Attorney General John Greene represented the State in this matter with assistance from DFI. For more information, contact Dana Brueck at the Wisconsin Department of Justice, or contact George Althoff at DFI at (608) 261-4504.
