Credit And Punishment
July 8, 2002
FTC Bans Debt Collector From Business, Refers Case To Justice Department
Inman News Features
Canoga Park, Calif.-based D.C. Credit Services and its co-owner David Cohen have agreed to pay a $300,000 civil penalty as part of a settlement of Federal Trade Commission charges that they violated the Fair Credit Reporting Act and the Fair Debt Collection Practices Act.
The consent decree also permanently would ban Cohen from engaging in debt collection activity and would require the defendants to notify consumer reporting agencies to delete all adverse information the defendants previously furnished to them over the past seven years. The defendants could re-report such adverse information only if they determined that the adverse information was accurate and reportable upon proper examination.
Amendments to the Fair Credit Reporting Act in 1997 for the first time imposed legal duties on debt collectors and others that furnish information to credit bureaus regarding the accuracy of that information.
The defendents, according to the FTC's complaint, furnished information to a consumer reporting agency when they knew or consciously avoided knowing that the information was inaccurate, failed to notify promptly a consumer reporting agency that previously furnished information was incomplete or inaccurate after having so determined, furnished adverse information to consumer reporting agencies without disclosing that the consumer previously had disputed the information being reported and falsely reported the dates of delinquency of debts.
Both defendants in 1992 executed consent decrees related to violations of the Fair Debt Collection Practices Act.
The latest consent decree would provide for a complete and permanent occupational ban on Cohen's involvement in debt collection effective Oct. 1. Until that time, he must cease having personal contact with consumers in connection with debt collection by D.C. Credit Services.
The FTC commissioners also decided to refer the complaint and the proposed consent decree to the Department of Justice for possible further action.
Copyright: Inman News Service
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