Text-Messaging Debt Collector Hit With $1 Million Fine for Posing as Law Firm

Woman in city park looking at smartphone
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Harassing text messages aren't just for scorned lovers anymore. At least one debt collection agency has been using texts to go after indebted consumers -- and the government says that those texts broke the law.

The Federal Trade Commission regularly sues debt collectors for illegal collection practices, but for the first time it's gone after a debt collector for chasing consumers with text messages. National Attorney Collection Services, Inc. and National Attorney Services LLC, which are both based in Glendale, Calif., and owned by Archie Donovan, have agreed to pay $1 million in the case.

It's not actually illegal to use text messaging to collect on outstanding debts. The big issue here is the name: Not only did the debt collectors fail to disclose they were calling from a debt collection firm, the companies' names gave the false impression that they were law firms. And according to the FTC, collectors represented themselves as attorneys or legal assistants in their text messages and phone calls.
The collectors also broke the law by revealing people's debts to their friends, family and co-workers -- specifically, by using envelopes with a cartoon of a man having his pockets shaken out by Uncle Sam. To protect consumers' privacy, debt collectors aren't supposed to reveal on their envelopes that there is a collection notice enclosed.

In a blog post amusingly titled "DONT VIOL8 FDCPA. K? THX," the FTC said that the debt collectors also directly disclosed debts to family members in phone calls and texts. Trying to shame consumers like that is a big violation of the Fair Debt Collection Practices Act.

In addition to the $1 million fine, the companies will have to cease any debt collection practices that violate the FDCPA, including changing the names of the businesses so as to stop giving the impression that they are lawyers.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

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They should do the something [ fine ] the A$$ holes that text @ 4:00 AM wanting to by junk cars... FIND THEM and FINE them...

September 26 2013 at 3:37 PM Report abuse rate up rate down Reply

A fine? this guy should be in jail !!!!!!!!!!!!!!!!!!! Amazing govt incompetence over and over. The citizen gets his life screwed up and the govt gets a million dollars? amazing

September 26 2013 at 3:09 PM Report abuse +2 rate up rate down Reply

Ha ha....lowlife trash bill collector.

Posing as a law firm. That's just the beginning.

September 26 2013 at 1:35 PM Report abuse +3 rate up rate down Reply

why only $117k. if i was certain I could double my money in a short period of time. i beg, borrow, but not steal, to invest every farthing i could get in the stock

September 26 2013 at 12:55 PM Report abuse rate up rate down Reply

Quesion is how many of these fines companies receive are ever paid, how many end up substantial reduced and are these fines tax deductable for these companies?

September 26 2013 at 12:00 PM Report abuse +3 rate up rate down Reply

practicing law without a license........after 200 years you have to practice??.....but being an imposter now that's another story - mis-representing the facts.........how can you tell a lawyer lying - HIS LIPS ARE MOVING

September 26 2013 at 11:58 AM Report abuse +2 rate up rate down Reply

Ha, ha! Talk about just desserts.

September 26 2013 at 11:45 AM Report abuse +2 rate up rate down Reply
Mike Hedrick

Amen. These people are scum.

September 26 2013 at 10:13 AM Report abuse +5 rate up rate down Reply
1 reply to Mike Hedrick's comment

I thnk that many of them actually enjoy harrasing people like that. They were bullies in high school.

September 26 2013 at 12:19 PM Report abuse +3 rate up rate down Reply

there were days I would have said that the debt collectors need to find a real job. not so much now.
All I can say is tell them you are going to get your card for the number. After about 20 minutes they might understand you are not coming back.

September 26 2013 at 9:58 AM Report abuse +3 rate up rate down Reply

Not enough....shoulda been $10 million !!

September 26 2013 at 8:29 AM Report abuse +4 rate up rate down Reply