Debt collection agency sued by Arkansas Attorney General

Arkansas Attorney General Dustin McDaniel recently announced that he has filed a lawsuit against Hutchinson, Kansas-based National Credit Adjusters. The debt collection agency allegedly failed to fully answer two formal investigative requests regarding its practices of collecting debts related to short term loans. According to a statement from the Attorney General's Office, NCA purchases the rights to collect on delinquent debts from either the original creditor or the third-party owner, and owns accounts originating from a number of short term lenders. InsideARM reports that the suit aims to compel the agency to respond to McDaniel's requests and prohibit the company from collecting debts in Arkansas until the inquiry is answered. "Our office will continue its effort to prohibit activities related to short term lending, whether it's by pursuing online short term lenders or a company like this, which is trying to collect on debts that were illegal in the first place," said McDaniel in a statement. In 2008, the Office of the Attorney General launched an effort to banish short term lenders from the state. The Arkansas Constitution caps consumer loan interest at 17 percent, effectively making short term lending illegal.