In an effort to resolve federal allegations, debt collector Allied Interstate has agreed to pay a $1.75 million dollar fine. Allied Interstate was accused of collecting on debts that people did not actually owe, contacting third parties, and threatening legal action that it did not intend to take.
Unsurprisingly, this type of behavior is illegal.
Allegations of illegal behavior
The Federal Trade Commission said this is the second-highest fine that has ever been paid by a debt collector. It hopes that this massive fine will send a message to debt collectors who attempt to collect on debts that consumers dispute.
According to a member of the FCC, “If you’ve got the wrong person, you should check it out, and you should stop.” Depending on the circumstances, the FDCPA also prohibits further collection efforts once a consumer disputes the validity of a debt.
The FTC also alleged that Allied Interstate talked to third-parties about the alleged debts—co-workers, neighbors, etc. This is also prohibited by the FDCPA.
Although the fine amount seems large, it likely pales in comparison to the profits of Allied Interstate over the past few years. Allied Interstate has 11 offices around the country, and employs a mind-blowing 442 debt collectors in Minnesota alone.