A global debt collection company and its Santa Rosa subsidiary will pay a record $3.2 million civil penalty to settle allegations they harassed consumers on the phone at work and late at night and left voicemail messages that divulged confidential information, the Federal Trade Commission said Tuesday.
Texas-based Expert Global Solutions, formerly known as NCO Group Inc., and Transworld Systems, with offices on Mercury Way in Santa Rosa, were among the defendants named in the lawsuit filed in the U.S. District Court in Dallas.
The complaint alleged numerous violations of the federal Fair Debt Collection Act, including calling multiple times a day and failing to verify debts when consumers said they owed nothing. The allegations cover a period from 2009 to 2011.
"Just because a consumer owes a debt doesn't mean they have to sacrifice their basic human dignity," said Christopher Koegel, the FTC's lead attorney on the case. "It doesn't mean they should be subjected to abuse or deceptive practices."
The companies reached a pre-trial settlement with the agency, agreeing to pay the largest fine ever levied by the Federal Trade Commission on a third-party debt collection company.
The settlement requires the companies to stop any further violations. Under the order, when a consumer disputes a debt, the companies now must end collection efforts until an investigation determines the accuracy of the claim. Also, the companies will be required to record phone calls and cannot disclose the debtor's name in voicemails.
Expert Global Solutions and its subsidiaries are the world's largest debt collection operation, with 32,000 employees and revenues of $1.2 billion in 2011, the FTC said.
Transworld Systems is a California corporation owned by Outsourcing Solutions Inc., a Delaware corporation, which is owned by Expert Global Solutions, Koegel said.
The company serves a wide range of customers, including Fortune 500 companies, internationally recognized corporations and small businesses, according to its website.
Barney Zeng, senior vice president and general manager of Transworld Systems' Atlantic division, could not be reached for comment Tuesday.
An employee who answered a phone at the Santa Rosa offices Tuesday said he was unaware of the settlement.