Two subsidiaries of IQor Holdings Inc. have agreed to pay $500,000 to agencies in five different states, including the Connecticut Department of Banking, for unlawful debt collection practices.
The Massachusetts Division of Banks, Idaho Department of Finance, Minnesota Department of Commerce and North Dakota Department of Financial Institutions were the other four agencies involved in the multistate investigation.
The lawsuit alleged that Allied Interstate LLC and The Receivable Management Services Corp., which owns the subsidiary Receivable Management Services – Recovery Division LLC, called phone numbers that had previously been marked as “Do Not Call” and documented the accounts “REHAB PUSH” to avoid potential disciplinary action. These actions violated federal and state consumer protection requirements, including the Fair Debt Collection Practices Act.
“The Department was pleased to partner with other state regulator’s in this enforcement action,” Matt Smith, a spokesperson for the Connecticut Department of Banking told The Commercial Record. “These types of collaborative efforts help us to change a company’s practices to adhere to state and federal law and fulfill one of our primary objectives of protecting Connecticut consumers.”
Settlement documents show Allied Interstate engaged in unfair and deceptive practices by failing to promptly credit debtor accounts upon receipt of payment by check. Instead, court documents allege, Allied delayed credit, typically for a period of four to five days, until the check cleared.
On interest-bearing accounts, according to the settlement documents, this resulted in unearned interest accruing on consumer accounts, misrepresenting the actual date that a payment is received from a consumer debtor to its clients.
Settlement documents further show Allied made “multiple harassing telephone calls to the consumer,” specifically to harass, oppress or abuse the person about the collection of a debt. Allied also allegedly contacted consumers at their places of employment, in violation of state law and the company’s own internal compliance policies.
The exam review period covered collection activity over a two-year period between Feb. 11, 2013, and Feb. 27, 2015, and was done simultaneously with a targeted review of Allied’s federal student loan collection activity by the Consumer Financial Protection Bureau.
The $500,000 settlement will be divided among the five states and the two subsidiaries have agreed to reform their debt collection practices.