FOR YOUR INFORMATION......................May 6, 1987 A federal district court has ordered a major debt-collection organization to pay $350,000 in civil penalties, as a result of Federal Trade Commission charges it violated the law by using abusive, deceptive, and unfair practices in collecting debts. The court order names ACB Sales and Services Inc., its subsidiaries, and two individual officers. The organization is made up of local collection offices in various cities throughout the country known as "The ACB Companies," most of which operate under the name American Creditors Bureau. In 1980 the FTC issued a complaint charging the organization violated a 1974 FTC order and the Fair Debt Collection Practices Act by using unfair and deceptive debt collection practices. The 1974 order settled FTC charges the organization had used unfair and deceptive debt collection practices. Under the current judgment, the court found "The evidence establishes a pervasive pattern of violations so numerous they cannot be dismissed as simply the work of a few maverick collectors. In many cases managers or supervisors joined with collectors in committing violations. The very nature of ACB's operations impels its employees to disregard the order and the act in attempting to collect debts." The court also found that "Any debtor who was unable or unwilling to make payment as demanded by a collector subjected himself to a torrent of abuse and harassment. He or she may have been cursed or otherwise verbally abused." The court stated that ACB debt collectors violated the law by routinely threatening legal action -- such as filing a lawsuit or garnishing wages -- that they did not intend to take. In addition, the court found that the ACB debt collectors frequently violated the order and the act by threatening to inform the debtor's employer and others that the debtor was not paying his bills and by calling debtors' places of employment after receiving requests not to call at work. According to the court, they also violated the order and the act by misrepresent ing that they were attorneys, legal advisers, friends of the debtor, and employees of the creditor. The court denied the Commission's request to issue injunc tive relief. However, the companies and the individuals remain bound by the 1974 order and by the Fair Debt Collection Practices Act. The companies covered by the judgment are: * ACB Sales & Service Inc., Phoenix, Ariz.; * ACB Management Services Inc., Phoenix, Ariz.; * American Creditors Bureau Inc., Phoenix, Ariz.; * Jemama Investment Company Inc., a corporation doing business as American Creditors Bureau of San Diego, American Creditors Bureau of San Francisco, and American Creditors Bureau of Los Angeles; (More) * Affiliated Creditors Bureau Inc., Chicago; * American Creditors Bureau of Houston Inc.; * American Creditors Bureau of Dallas Inc.; * American Collection Bureau of Georgia Inc., Atlanta; * American Creditors Bureau of Philadelphia Inc.; * American Creditors Bureau of Colorado Inc., Denver; * American Creditors Bureau of New York Inc., N.Y.; * American Creditors Bureau of Florida Inc., North Miami; * American Creditors Bureau of Ohio Inc., Lakewood, Ohio; and * American Creditors Bureau of Boston, Inc. The judgment also requires Jerry Middleman and Jerry Raker, officers and directors of the companies, to pay $25,000 each as part of the total amount of civil penalties. The judgment dismisses charges against Jack J. Schwartz. The U.S. District Court for the District of Arizona issued the judgment April 29. Copies of the court judgment are available from the FTC's Public Reference Branch, Room 130, 6th St. and Pennsylvania Ave. N.W., Washington, D.C. 20580; 202-326-2222; TTY 202-326-2502. # # # MEDIA CONTACT: Dee Ellison, Office of Public Affairs, 202-326- 2177 STAFF CONTACT: Roger Fitzpatrick, Bureau of Consumer Protection, 202-326-3172 Christopher Keller, Bureau of Consumer Protection, 202-326-3159 FTC File No. C-2608 Civil Action No. CIV 80-251 PHX CLH [ACB]
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