IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION

UNITED STATES OF AMERICA, Plaintiff,

v.

PERIMETER CREDIT, L.L.C. and ACCOUNT PORTFOLIOS, INC., Defendants.

Civil Action No.

CONSENT DECREE

WHEREAS, Plaintiff, the United States of America, has commenced this action by filing the Complaint herein; Defendants have waived service of the Summons and Complaint; the parties have been represented by the attorneys whose names appear hereafter; and the parties have agreed to settlement of this action upon the following terms and conditions, without adjudication of any issue of fact or law and without Defendants admitting liability for any of the matters alleged in the Complaint;

THEREFORE, on the joint motion of Plaintiff and Defendants, it is hereby ORDERED, ADJUDGED, AND DECREED as follows:

  1. This Court has Jurisdiction of the subject matter herein and of the parties hereto.
  2. The Complaint states a claim upon which relief may be granted under Sections 5(m)(1)(A), 9, 13(b), and 16(a) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § § 45(m)(1)(A), 49, 53(b), and 56(a); and Section 814 of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 16921.
  3. For purposes of this Consent Decree ("Decree"), the definitions set forth in the FDCPA, 15 U.S.C.§ 1692a, shall apply.

CIVIL PENALTY

  1. Defendants, their successors and assigns, shall pay to Plaintiff, pursuant to Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. § 45(m)(1)(A), a civil penalty in the amount of $300,000.00 due and payable on or before the fifth day following the entry of this Decree. This payment shall be made by electronic fund transfer in accordance with procedures specified by the Office of Consumer Litigation, Civil Division, United States Department of Justice, Washington, D.C. 20530.
  2. In the event of any default in payment, which default continues for ten (10) days beyond the due date of payment, the entire unpaid penalty, together with interest, as computed under 28 U.S.C. § 1961 from the date of default until the date of payment, shall immediately become due and payable.

INJUNCTION

  1. Defendants, their successors and assigns, their officers, agents, servants, employees, account representatives, and attorneys, and those persons in active concert or participation with any of one or more of them, who receive notice of this Decree by personal service or otherwise, are hereby permanently enjoined, directly or through any corporation, subsidiary, division, partnership or other device, in connection with the collection of a "debt" from a "consumer," as those terms are defined in Section 803(3) and (5) of the FDCPA, 15 U.S.C. § § 1692a(3) and 1692a(5), from:
    1. Communicating with a consumer at the consumer's place of employment when Defendants know or should have known that it is inconvenient to the consumer, after the consumer informed Defendants that their calls at work were inconvenient, in violation of Section 805(a)(1) of the FDCPA, 15 U.S.C. § 1692c(a)(1);
    2. Communicating with a consumer at the consumer's place of employment when Defendants know or should have known that the consumer's employer prohibits the consumer from receiving such calls, in violation of Section 805(a)(3) of the FDCPA, 15 U.S.C. § 1692c(a)(3);
    3. Communicating or threatening to communicate with any person other than the consumer, the consumer's attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the creditor's attorney, or the debt collector's attorney, in connection with the collection of a debt, for any purpose other than to obtain location information about the consumer not previously known to Defendants, unless Defendants have the prior consent of the consumer given directly to Defendants, or the express permission of a court of competent jurisdiction, or Defendants can show that such communication is reasonably necessary to effectuate a post-judgment judicial remedy, in violation of Section 805(b) of the FDCPA, 15 U.S.C. § 1692c(b);
    4. Communicating with a consumer with respect to a debt after a consumer has notified Defendants in writing that the consumer refuses to pay a debt or that the consumer wishes Defendants to cease further communication with the consumer, in violation of Section 805(c) of the FDCPA, 15 U.S.C. § 1692c(c), except:
      1. to advice the consumer that Defendants' further efforts are being terminated;
      2. to notify the consumer that Defendants or a creditor may invoke a specified remedy which are ordinarily invoked by Defendants or such creditor; or
      3. where applicable, to notify the consumer that Defendants or a creditor intend to invoke a specified remedy;
    5. Engaging in conduct the natural consequence of which is to harass, oppress, or abuse any person, including, but not limited to, using obscene or profane language, or language the natural consequence of which is to abuse the hearer or reader, in violation of Section 806 of the FDCPA, 15 U.S.C. § 1692d;
    6. Using any false, deceptive, or misleading representations or means to collect or attempt to collect a debt, including, but not limited to, communicating or threatening to communicate to any person credit information which is known or which should be known to be false, and failing to communicate that a debt that is disputed under Section 809(b) is disputed, in violation of Section 807 of the FDCPA, 15 U.S.C. § 1692e;
    7. Failing to notify consumers, either in Defendants' initial communication with consumers or in writing, within five days thereafter, of their right to dispute the validity and obtain verification of a debt Defendants are attempting to collect and to obtain the name of the original creditor, in violation of Section 809(a) of the FDCPA, 15 U.S.C. § 1692g(a);
    8. Continuing to attempt to collect a debt when consumers have notified Defendants in writing that a debt or any portion thereof is disputed and before verification of the debts is provided, in violation of Section 809(b) of the FDCPA, 15 U.S.C. § 1692g(b); and
    9. Engaging in any other act or practice which would violate the FDCPA, as amended, 15 U.S.C. § 1692.
  2. With respect to consumer debts originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation received for collection after the date of entry of this Decree, Defendants, and their successors and assigns, shall, for a period of five (5) years from the date of the filing of this Decree, make the following disclosure clearly and conspicuously on written collection communications concerning consumer debts originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation that is sent to a consumer:

The law requires us to stop contacting you about this debt if you write to us and ask us to stop. However, under the law, we may still contact you for two reasons:

  • To advise you that we intend to pursue specific remedies permitted by law; or
  • To advise you that our efforts are being terminated.

This law is enforced by the Federal Trade Commission, Washington, DC 20580.

  1. Defendants, and their successors and assigns, shall provide a copy of the following Notice to all present officers, servants, agents, account representatives, and employees having responsibility with respect to the collection of debts, within thirty (30) days of the date of the entry of this Decree, and to each employee hired for a period of five (5) years after that date, no later than the time the employee assumes responsibility with respect to the collection of debts; and shall secure from each such person a signed statement acknowledging receipt of a copy of the Notice:

Debt collectors must comply with the federal Fair Debt Collection Practices Act, which limits our activities in trying to collect money from consumers. Most importantly, Section 806 of the Act prohibits you from harassing, oppressing, or abusing a person, including, but not limited to, using obscene or profane language. In addition, Section 807 of the Act prohibits you from using false, deceptive, or misleading representations, including communicating false information about a person's credit history. Individual debt collectors may be financially liable for their violations of the Act.

PERSONS AFFECTED; CONTINUING JURISDICTION

  1. Defendants, their successors and assigns, shall provide a copy of this Consent Decree and the FDCPA to each of their officers, servants, agents, attorneys, and employees having responsibility with respect to the collection of debts, within thirty (30) days of the entry of this Consent Decree, and to each employee hired for a period of five (5) years after that date, no later than the time the employee assumes responsibility with respect to the collection of debts, and shall secure from all such persons a signed statement acknowledging receipt of a copy of this Consent Decree.
  2. Defendants, their successors and assigns, shall, within ninety (90) days of the date of the entry of this Consent Decree, and once each year thereafter for three years within thirty (30) days of the anniversary of that date, file with the Regional Director, Federal Trade Commission, Atlanta Regional Office, 60 Forsyth Street, Suite 5M35, Atlanta, Georgia 30303, a written report setting forth in detail the manner and form of their compliance with this Consent Decree.
  3. For a period of five (5) years from the date of the entry of this Decree, Defendants, and their successors and assigns, shall maintain and make available to the Commission, within thirty (30) days of receipt of a written request, business records demonstrating compliance with the terms and provisions of this Decree.
  4. Defendants, and their successors and assigns, shall notify the Regional Director, Federal Trade Commission, Atlanta Regional Office, 60 Forsyth Street, 5M35, Atlanta, Georgia 30303, at least thirty (30) days prior to any change in Defendants' business, including but not limited to merger, incorporation, dissolution, assignment or sale which results in the emergence of a successor corporation or partnership, the creation or dissolution of a subsidiary or parent, the acquisition of any new business, or any other change that may affect Defendants' obligations under this judgment.
  5. For a period of five (5) years from the date of the filing of this Decree, Defendants, their successors and assigns, shall, in connection with the transfer, sale, or assignment to any affiliate of consumer debts originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation, provide a copy of this Decree to the transferee, purchaser, or assignee, and shall, as a condition of such transfer, sale, or assignment, require the transferee, purchaser, or assignee to agree in writing to be bound by Paragraphs 6-7 of this Decree in connection with the collection of those accounts. Defendants, their successors and assigns shall notify the Regional Director, Federal Trade Commission, Atlanta Regional Office, 60 Forsyth Street, 5M35 Atlanta, Georgia 30303 within 30 days of the transfer, sale or assignment to any affiliate of consumer debts originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation. For purposes of this Paragraph, "affiliate" means: (i) an entity controlled or  owned, directly or indirectly, by Defendants; (ii) any entity that controls or owns Defendants, either directly or indirectly; or (iii) any entity that is controlled or owned, either directly or indirectly, by any entity described in (ii) above.
  6. This action, and the relief afforded herein, is in addition to and not in lieu of such other remedies as may be provided by law, including both civil and criminal remedies. Plaintiff and the Federal Trade Commission agree, however, that they shall not bring any enforcement action pursuant to the FDCPA or the FTC Act based upon violations alleged in paragraphs 8 through 15 of the Complaint in this action, or based upon alleged violations known by the United States or the Federal Trade Commission prior to the entry of this Consent Decree concerning the activities of Defendants in connection with their collection of debts originating from non-performing health club receivables purchased from Bally's Health & Tennis Corporation.
  7. This Court shall retain jurisdiction of this matter for the purpose of enabling any of the parties to this Decree to apply to the Court at any time for such further orders or directives as may be necessary or appropriate for the interpretation or modification of this Decree, for the enforcement of compliance therewith, or for the punishment of violations thereof.

JUDGMENT IS THEREFORE ENTERED in favor of Plaintiff and against Defendants, pursuant to all the terms and conditions recited above.

Dated this ____ day of _______, 1999.

_____________________
United States District Judge
Northern District of Georgia

The parties, by their respective counsel, hereby consent to the terms and conditions of this Consent Decree as set forth above and consent to the entry thereof. Defendants hereby waive rights that may arise under the Equal Access to Justice Act, 28 U.S.C. § 2412, amended by Pub. L. 104-121, 110 Stat. 847, 863-64 (1996).

FOR PLAINTIFF:

FOR THE UNITED STATES OF AMERICA

DAVID G. OGDEN
Acting Assistant Attorney General
Civil Division
U.S. Department of Justice

RICHARD H. DEANE, JR.
United States Attorney
Northern District of Georgia

By: ______________________
Assistant United States Attorney
75 Spring Street, S.W.
Atlanta, Georgia 30303

EUGENE THIROLF
Director
Office of Consumer Litigation

By: ______________________
Elizabeth Stein
Office of Consumer Litigation
U.S. Department of Justice
Washington, D.C. 20530
(202) 307-0486

FOR THE FEDERAL TRADE COMMISSION

David Medine
Associate Director for Credit Practices
Bureau of Consumer Protection
Washington, D.C. 20580

________________________
Anthony E. DiResta
Director, Atlanta Regional Office
60 Forsyth Street, S.W.
Suite 5M35
Atlanta, Georgia 30303

FOR DEFENDANTS:

ACCOUNT PORTFOLIOS, INC.

By: _________________________
Bryan Faliero
Managing Director

PERIMETER CREDIT, L.L.C.

By: _________________________
Bryan Faliero
Managing Director

BRYAN CAVE LLP
700 Thirteenth Street, N.W.
Washington, D.C. 20053

By: _________________________
Daniel C. Schwartz

By: _________________________
Walter E. Zalenski

KILPATRICK STOCKTON LLP
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309

By: _________________________
Kent E. Mast