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FOR IMMEDIATE RELEASE: October 17, 1989

FTC CHARGES DEBT COLLECTOR VIOLATED FAIR DEBT

COLLECTION PRACTICES ACT;

COMPANY AGREES TO PAY $40,000 PENALTY

The Federal Trade Commission has charged in court that a New York debt collection agency and an attorney, who lent his name to the agency, falsely represented that computer-generated letters to consumers were from the attorney. Through these letters, they also misrepresented that the debt collection agency intended to take legal action against the consumer. Under the consent decree settling the charges, the defendants have agreed to pay $40,000 in civil penalties and agreed to refrain from such practices in the future.

The complaint charges that NCB Business Services, Inc.,  doing business as NCB Collection Services Inc., and Thomas P. Tedeschi, an attorney, violated the Fair Debt Collection Prctices Act (FDCPA), the federal law that prohibits deceptive and abusive practices by debt collectors attempting to collect debts from consumers.

According to the complaint, NCB mailed computer-generated form debt collection letters to numerous consumers. These

letters were printed on Tedeschi's letterhead with a facsimile of the attorney's signature at the bottom. The content and format of the attorney letters allegedly conveyed the impression that the consumer was about to be sued.

Under the consent decree, the defendants agree not to threaten to take action that they do not intend to take, such as filing a lawsuit, in violation of the Act. They also agree not to state that they may take action if they are unable to show that at the time the representation was made, there is a reason- able likelihood that legal action would be taken. In addition, they agree not to misrepresent that any individual is an attorney or that any communication is from an attorney.

The Department of Justice filed the complaint and consent decree in the U.S. District Court for the Southern District of New York at the FTC's request.   This consent decree is for settlement purposes only and does not constitute an admission by the company that it violated the law. Consent decrees have the force of law.

Copies of the complaint and consent decree will be available shortly from the FTC's Public Reference Branch, Room 130, 6th St. & Pennsylvania Ave., N.W., Washington, D.C. 20580; 202-326-2222; TTY 202-326-2502.

MEDIA CONTACT: Brenda A. Mack, Office of Public Affairs   202-326-2180

STAFF CONTACT: Jean Noonan, Bureau of Consumer Protection, 202-326-3224

Charlyn J. Buss, Bureau of Consumer Protection, 202-326-2974

Civil Action No. 89-Civ. 6834 (MBM)

(ncb)