By
Kenneth Long on February 20, 2012
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The Minnesota Department of Commerce has hit NCO Financial with a $250,000 fine for failing to properly screen its employees. Officials claim that convicted felons had been allowed to contact debtors at 49 collection agencies that are owned by NCO Financial Systems Inc.
The civil penalty paid by NCO represents violations that were committed by convicted felons who were employed by NCO subsidiaries. Many of these actions were violations of state laws as well as the
Fair Debt Collection Practices Act.
This really brings into question the safety of consumer information. Debt collectors have access to quite a bit of personal information. Furthermore, debtors who provide credit card or bank account information are opening themselves up to potential theft or fraud. Debt collection firms must make sure that they are properly screening employees who will have access to such sensitive client information.
According to the Minnesota Department of Commerce, not only did NCO fail to properly screen applicants for criminal backgrounds, they also failed to notify regulators when they discovered that felons employed by NCO committed FDCPA violations. In one case, an employee even stole funds from an incentive program.
Commissioner Mike Rothman released the following statement:
"Our investigators are thoroughly examining the hiring practices of debt collection agencies doing business in Minnesota. Employing convicted criminals to collect sensitive personal information from financially stressed consumers is against the law – and it cannot be tolerated."
Commissioner Rothman added that “turning loose convicted felons on vulnerable Minnesota consumers is a dangerous recipe for fraud and financial abuse.” The actions by his department send a powerful message to all debt collectors that they need to ensure they have taken adequate safeguards to protect the consumers that they are contacting.
Debt collection violations are still quite widespread among collection agencies. As a result the biggest agencies are big targets for state and federal regulators who are fighting abusive collection tactics that are frequently used against consumers.