States Reach Agreement With Debt Collector NCO Financial

Debt collector NCO Financial Systems, Inc. (NCOF) has agreed to change certain collections practices as part of a settlement announced today by Ohio Attorney General Mike DeWine and 18 other states. The settlement resolves concerns about NCOF's debt collection practices.

"We believe this is a fair settlement that will help uphold consumers' rights under the Fair Debt Collection Practices Act," Attorney General DeWine said. "NCOF is agreeing to provide restitution for eligible consumers, to provide stronger notifications to credit reporting agencies and consumers, and to implement policies to ensure compliance with federal and state law."

Since 2008, Ohio has led a multi-state working group that investigated allegations of misleading and deceptive debt collection practices by NCOF.

In the settlement, NCOF agrees to:

• Comply with the federal Fair Debt Collection Practices Act, the federal Fair Credit Reporting Act, and all applicable state laws.
• For debts reported to the credit reporting agencies, notify the credit reporting agencies within 30 calendar days of (1) any verbal or written consumer dispute or (2) receiving the results of an investigation into the accuracy or completeness of previously reported information.
• Provide notice to consumers about their debt collection rights under federal and state law.
• Monitor compliance, including training and monitoring its representatives and independent contractors, creating written policies and procedures for handling consumer complaints, and submitting compliance reports to the states every 6 months for 18 months.

Additionally, consumer restitution will be available for three years following the effective date of the agreements. NCOF will set aside $950,000, or $50,000 for each of the 19 participating states, for consumers who have valid claims that meet one of the following criteria:

• Consumer paid NCOF a third party debt that the consumer did not owe; 
• Consumer overpaid interest on a third party debt that was not supported by the underlying agreement between the debtor and the original holder of the debt or as otherwise permitted by law; or 
• Consumer paid more on a third party debt than the amount NCOF agreed to settle the account. 

NCOF also has agreed to pay $575,000 for the states' consumer protection enforcement efforts. As the lead of the group, Ohio will receive $76,562.50 of the payment.

Joining Ohio in the multi-state working group were the following states: Alaska, Arkansas, Idaho, Illinois, Iowa, Kentucky, Louisiana, Michigan, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, Vermont, and Wisconsin.