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Debt collector accused of posing as law firm will pay $1M in first FTC case over texts

Posted Sep 26, 2013 12:55 PM CDT
By Martha Neil

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Envelope sent to debtors. Image from FTC.

A California-based debt collector has agreed to pay $1 million to settle a Federal Trade Commission case. The collection company allegedly falsely portrayed itself as a law firm and sent text messages to debtors which didn't include a validation notice with information required by law to be provided in an initial debt-collection contact.

Also at issue in the case against National Attorney Collection Services, Inc. and National Attorney Services LLC were claimed tactics that publicly revealed private debts. For example, envelopes sent to consumers included an illustration of a large arm in a red, white and blue striped jacket shaking a small, upside-down individual with money falling out of his pockets, according to an FTC press release, which includes a photo of the envelope.

The case is the first ever brought by the FTC over text messages.

Both companies are controlled by Archie Donovan. His lawyer, Barry J. Cutler, said Donovan cooperated with the FTC investigation, reports the Associated Press.

"The companies are now in compliance," Cutler said. "Nobody was intending to violate the law."

Hat tip: Daily Finance.

See also:

Business Center Blog (Bureau of Consumer Protection): "DONT VIOL8 FDCPA. K? THX"

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