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Minnesota Commerce Department Announces More Actions in New Federal-State Crackdown Against Abusive Debt Collectors

1/7/2016 12:54:31 PM

SAINT PAUL – Minnesota Commerce Commissioner Mike Rothman announced that his agency has taken additional enforcement actions as part of a new federal-state crackdown against illegal practices by debt collection companies.

“We are focused on protecting the public from being victimized by deceptive and abusive debt collection tactics,” said Rothman. “Minnesotans have important consumer rights under both federal and state debt collection laws, and the Commerce Department is committed to enforcing these laws to ensure a fair marketplace for both consumers and businesses.”

In early November, Rothman joined Federal Trade Commission (FTC) Chairwoman Edith Ramirez and Illinois Attorney General Lisa Madigan for a news conference in Washington, DC, to launch the new nationwide enforcement initiative, called “Operation Collection Protection.”

It is the first coordinated federal-state enforcement initiative that targets debt collectors whose illegal tactics include harassing phone calls, false threats of lawsuits and arrest, attempts to collect phony debts, failure to provide consumers with legally required disclosures and noncompliance with state licensing requirements. 

Through its participation in Operation Collection Protection, the Minnesota Commerce Department is working more closely and effectively with other state and federal agencies to take action against misconduct in the debt collection industry.

The Minnesota Commerce Department licenses and regulates debt collection agencies and individual debt collectors who operate in the state. In recent years, the department has strengthened compliance supervision and stepped up enforcement actions against unlicensed debt collectors and abusive collection practices.

Last year, the Commerce Department imposed a $500,000 penalty against Tucker Albin, a Texas debt collection company whose employees harassed and threatened more than 100 small businesses across Minnesota. The financial penalty was the largest ever imposed on a debt collection agency by the department.

In the past two months, the Commerce Department has taken these enforcement actions against debt collectors:

Collect Pros

The Commerce Department issued a cease-and-desist order and imposed a $13,000 penalty against the company for operating unlicensed locations and failing to provide state-required disclosures on nearly 3,000 dunning notices to Minnesota consumers. 

Service Investment Company, Inc.

The Commerce Department issued a cease-and-desist order and imposed a $20,000 penalty against the company for repeated violations of the federal Fair Debt Collection Practices Act by sending notification letters that used “overshadowing” language to confuse consumers about their rights, including the right to dispute a debt within 30 days. 

CLX/Westwood Management, Inc.

The Commerce Department secured a court order to appoint a receiver over this company’s operations, based on allegations of financial mismanagement involving trust accounts and payments to clients. The department also has an ongoing investigation into the company’s debt collection activities.

Commerce is here to help

If you have questions or concerns about abusive debt collection practices, contact the Minnesota Commerce Department’s Consumer Services Center by email at consumer.protection@state.mn.us or by phone at 651-539-1600 or 800-657-3602 (Greater Minnesota).

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