Buffalo Collector Gets Hit with $85,000 Fine by State AG

http://www.insidearm.com/news/00005173-buffalo-collector-gets-hit-with-85000-fin/

New York Attorney General Andrew Cuomo announced yesterday that his office had reached an agreement with a Buffalo, N.Y.-area debt collector over alleged overzealous debt collection practices that will see the firm pay $85,000 in penalties.

The company, National Action Financial Services, Inc. (NAFS) of Williamsville – on the outskirts of Buffalo – also agreed to reform its business practices, according to the AG’s press release. NAFS employs some 350 people in Western New York.

The AG’s office said that NAFS had 90 complaints logged against it nationwide over the past three years, and that many of the complaints centered around contact with third parties during the company’s skip tracing process.

Mike Farber, a spokesman for NAFS, told insideARM in a statement that the company entered into the agreement to avoid further litigation. Farber said that the company denied any wrongdoing or violations of laws.

Farber noted that the investigation was triggered by then-attorney general Eliot Spitzer’s 2006 public commitment to investigate the collection industry. That year, consumers logged 25-30 complaints against NAFS with the AG’s office, a small percentage of the 5 million consumer contacts NAFS makes on a yearly basis, according to Farber.

NAFS is a unit of global call center outsourcing firm Sitel, based in Omaha, Neb.

NAFS was one of two collection agencies that resigned from the Better Business Bureau of Upstate New York in October ahead of possible expulsion by the business organization ("Two Collection Agencies Resign from Buffalo BBB," Oct. 4).

According to the AG’s release, in addition to the $85,000 in civil penalties and costs to New York, the agreement requires NAFS to immediately reform collection practices to be in line with state and federal laws, and to devote more resources to ensuring compliance. NAFS, which cooperated fully with the investigation, must also submit a report detailing the changes to the Attorney General’s Office by March 11.