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Department of Justice 
WEB SITE POSTING http://www.usdoj.gov/opa/pr/Pre_96/March95/131.txt.html FOR IMMEDIATE RELEASE CIV WEDNESDAY, MARCH 8, 1995 (202) 616-2765 TDD (202) 514-1888 PAYCO PAYS LARGEST PENALTY EVER FOR DEBT COLLECTION VIOLATIONS WASHINGTON, D.C. -- One of the nation's largest debt collection firms, Payco American Corporation, today agreed to pay a $500,000 civil penalty, the largest ever imposed under the Fair Debt Collection Practices Act, to settle allegations it harassed consumers in collecting money on behalf of creditors, the Department of Justice announced. The company, headquartered in Brookfield, Wisconsin, was accused of such things as falsely threatening to have attorneys as collectors, using obscene and profane language and making repeated phone calls, sometimes late at night or early in the morning. Payco, in settling the case, agreed to not only abide by the law but also advise consumers and their employees of a consumer's rights under the law. Frank W. Hunger, Assistant Attorney General for the Civil Division, and Thomas Schneider, U.S. Attorney in Milwaukee, Wisconsin, said the consent decree filed in U.S. District Court in Milwaukee resolves a complaint the Department filed in August 1993 at the request of the Federal Trade Commission. Payco, which collects debts from consumers on behalf of credit card companies, health care providers, educational institutions and retailers, did not admit liability. The Department said today's decree was the most stringent ever obtained under the act, while the $500,000 penalty more than tripled previous penalties imposed for violations of the act. Hunger said, "I am confident that the resolution of this case will result in increased compliance with the act, not only by Payco but also by the debt collection industry at large." The Fair Debt Collection Practices Act is a federal law that regulates the behavior of debt collection agencies when they attempt to collect debts on behalf of creditors. The government's suit against Payco alleged that the company violated the act by, among other things: --Contacting consumers at their jobs even though Payco knew or had reason to know that the employers prohibited such contacts. --Contacting consumers at times that Payco knew or should have known were inconvenient, such as before 8:00 a.m. or after 9:00 p.m.. --Communicating about alleged debts with persons other than the consumer without having obtained the consumer's permission. --Making repeated telephone calls to annoy or harass the person receiving the calls. --Falsely threatening to have consumers arrested or have their property seized or wages garnished for nonpayment of debts. --Making other false representations and using false names in attempting to collect debts. Today's decree prohibits Payco from violating the act in any of those specific ways or in any other way. It also requires Payco to tell consumers when it writes to them the first time of their right under the act to have Payco stop communicating with them about a debt. Payco also is required to advise its employees in writing of their obligation to comply with the act. ##### 95-131