7/14/2015 9:42:49 AM
For Immediate Release
SAINT PAUL – Minnesota Commerce Commissioner Mike Rothman announced today that a Texas-based debt collection company whose employees harassed and threatened more than 100 small businesses across Minnesota is now facing a $500,000 penalty and a consent order that requires the company to change its ways, including rewriting its collection manual and retraining its employees. The financial penalty is the largest ever imposed on a debt collection agency by the Minnesota Commerce Department.
The company – Tucker, Albin and Associates, Inc., of Richardson, Texas – specializes in commercial debt collection, seeking to recover money owed or due by businesses. Although it was licensed to operate as a collection agency in Minnesota, the company committed numerous violations of state and federal law.
“Our Commerce Department investigation uncovered a pattern of deliberate, repeated misconduct in the company’s debt collection activities,” said Rothman. “As a matter of company policy, its debt collectors were trained and directed to deceive, harass and threaten small business owners to coerce payments from them. They used caller ID to pretend to be family members or neighbors when calling; they claimed to be private investigators when they were not; and they threatened to hire people to stand in front of businesses with signs saying they didn’t pay their debts.”
After being contacted last year by a Minneapolis small business that had been a victim of the company’s abusive collection tactics, the Commerce Department launched an investigation of Tucker, Albin.
The investigation uncovered a wide range of violations by the company as it sought to collect money from mostly small businesses in Greater Minnesota. More than 100 businesses were victimized in communities across the state – including Albert Lea, Alexandria, Austin, Elk River, La Crescent, McGregor, Nisswa, Osakis, Perham, Redwood Falls, Shakopee and St. Cloud. The victims included farmers, restaurants, construction companies and body shops, as well as a commercial truck operator, a doctor and a veterinarian.
The Commerce Department’s consent order details specific charges against Tucker, Albin. They include:
The company wrote a collection manual and trained its collectors in practices that violated the federal Truth in Caller ID Act. For example, collectors would “spoof” the phone numbers of victims’ family members or neighbors so these numbers would show up on caller ID instead of the company’s phone number in Texas.
The company trained its collectors to conduct “DTOs,” short for Detective Talk Offs. The collectors would claim to be private investigators, threatening to take pictures of a victim’s business, run checks on vehicles in the parking lot and interview employees as they left the business. However, the company never hired any private investigators in Minnesota and none of its employees were licensed to work as private investigators in the state.
The company wrote its collection manual and trained its collectors to use “dig” emails and phone calls. For example, collectors would contact nearby businesses and ask pointed questions about a victim’s business. In several cases, the victims were farmers and the company called local greenhouses and livestock auction houses. These phone calls were intended to harass and intimidate, violating Minnesota law.
The company wrote a collection manual and trained its collectors to threaten actions they could not legally take. These false threats included freezing assets, having their insurance revoked and reporting the victims to the IRS or other government agencies. These threats were intended to intimidate and coerce the victims to make payments, in violation of Minnesota law.
In response to the charges, Tucker, Albin has agreed to the following settlement with the Minnesota Commerce Department:
The company will cease and desist from further violations of Minnesota laws.
The company agrees to a civil penalty of $500,000, including $130,000 to be paid immediately and $10,000 to be paid each month for the next year. Payment of the remaining $250,000 will be stayed for two years, but must be paid in full immediately if the company violates the cease-and-desist order.
Within 60 days, the company will review and rewrite all collector training materials, instructions, letters, emails and all other communications with debtors to comply with state and federal laws.
The company will provide retraining to their collectors, managers and owners to prevent further violations, providing written proof of this retraining within 60 days.
The company will implement a compliance training and monitoring program to prevent further violations and provide quarterly reports to the Commerce Department during the next year.
The company will provide quarterly reports to the Commerce Department during the next year about all complaints it receives involving Minnesota debtors or creditors.
The Minnesota Commerce Department licenses and regulates collection agencies and debt collectors operating in the state. Rothman noted that, in addition to responding to complaints, the Commerce Department has stepped up its audits of collection agencies to ensure compliance with relevant laws to protect Minnesota consumers and promote a fair marketplace.
“We understand that people who have debts may sometimes be reluctant to come forward and complain,” Rothman said. “They may not understand their rights or recognize what types of debt collection activities are prohibited. In turn, collection agencies need to comply with their legal obligations and know that the Commerce Department is on the beat.”