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Houston collector faces massive fine: What can you learn?

Jul 07, 2014 Philip Burgess

Houston collector faces massive fine: What can you learn?

The most savvy of workers can find a lesson in every situation that goes wrong within their industry. For instance, marketers who created a failed campaign might realize that they should have done some more focused research into their target audience going into things or recognize that the method of delivery wasn't appropriate for that segment.

This theory is certainly true of debt collectors. While the industry tends to get a bad rap in the media, there is a multitude of legitimate employees who operate in this arena. Their work allows product prices to stay stable, pumps once-missing money back into the economy and has a number of other positive attributes. However, one bad apple can sully the whole bunch. When a story about a fake debt collector scamming individuals comes out, consumers can end up distrusting the whole sector.

Debt collectors can learn a lesson from a recent case in Houston, in which a legitimate debt recovery company was fined $4 million by the Federal Trade Commission. Administrators at these businesses can use this situation in their training modules when explaining to new employees what they shouldn't be doing.

Deceptive tactics won't fly

It can be very tricky to get consumers to pay bills they owe when they have no intention of doing so. However, turning to deceptive strategies is a big no-no, this recent case showed.

According to ACA International, the FTC filed a complaint after a Houston-based collection company obtained more than $1.3 million thanks to what it called "convenience" and "transaction" fees. The news source said these sums were amassed after debtors gave authorization over the phone.

The FTC alleged that the corporation told individuals that this money couldn't be sent via mail, but that it had to be paid. Moreover, the governing body asserted that the company said it had spoken to lawyers and would sue if a payment wasn't made.

"In some instances, the fees were added to consumers' accounts without their knowledge or consent, according to the FTC," the news provider stated.

Learning the lesson
As The Consumerist pointed out, once a company faces a fine like this, it's prohibited from ever repeating one of these alleged offenses or it will be shut down. However, it's not just Houston collectors who can learn something from this situation.

Always staying on the right side of the law, following the Fair Debt Collection Practices Act and telling debtors the truth are simply best practices recovery agents across the country should be taught to follow from day one.