Debt Collector Settles FTC Charges of Violations of Fair Credit Reporting and Fair Debt Collection Acts

A tenant screening and debt collection agency operating in California, Idaho, Oregon and Washington has agreed to settle Federal Trade Commission charges that it violated provisions of the Fair Debt Collection Practices Act (FDCPA) that prohibit the use of threatening, harassing and deceptive tactics to collect debts. The settlement also addresses the defendant’s repeated failure to correct inaccurate data about tenants in consumer files it made available to potential landlords. Under terms of the settlement, IS International (ISI) would pay a $10,000 civil penalty and would be enjoined from violating the laws in the future. In addition, the firm and its employees would be required to inform consumers of their protections under the law.

ISI is a Bothell, Washington-based corporation that has had branch offices in San Diego and Buena Park, California, and in Portland, Oregon. The company performs screening of tenant applicants for apartments, executes evictions and acts as a collection agency for rent and damage charges.

The FTC complaint alleges that ISI engaged in a wide range of abuses and violations of the FDCPA, including;

• revealing consumers’ debts to third parties;
• making harassing and abusive telephone calls, including calls at times and places known to be inconvenient for consumers;
• using obscene and profane language;
• making false or deceptive representations, including misrepresentations about the amount, or legal status of debts and misrepresenting that an attorney was involved in collecting the debts;
• making threats to take actions that could not legally be taken; and
• using deceptive means to collect debts or to obtain information about consumers.

These practices violate the FDCPA, according to the FTC complaint.

In addition to debt collection, ISI gathers and evaluates information about consumers and sells the information as tenant reports to third parties. In connection with this consumer reporting business, the FTC complaint alleges that ISI failed to delete inaccurate information in consumers’ files after the inaccuracy was brought to its attention, in violation of the Fair Credit Reporting Act (FCRA).

To settle the FTC complaint, ISI would pay a $10,000 civil penalty. In addition, it will be enjoined from revealing consumers’ debts to third parties; making threatening or harassing telephone calls or using obscene or profane language; and misrepresenting who it is or what legal action it may take.

ISI also will be required to disclose to consumers it is pursuing for debt collection that “the law requires us to stop contacting you about this debt if you write to us and ask us to stop,” and to insure that its employees comply with the FDCPA and the FCRA.

The Commission vote to accept the proposed consent decree was 5-0. It was filed yesterday by the Department of Justice at the request of the FTC. It is subject to court approval.

NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees have the force of law when signed by the judge.

Copies of the complaint and consent agreement are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov

(FTC File No. 942 3204)

(Civil Action No. C96 1137 WLD)