By
Kenneth Long on January 16, 2012
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Illinois Attorney General Lisa Madigan announced that her office has filed a lawsuit against PN Financial Inc. of Skokie, IL and its owner, Nelson Macwan. The debt collector must now defend itself against allegations that it committed numerous state and federal collection law violations. Madigan revealed certain violations committed by the collector during an announcement of major complaints fielded by her office.
Revealing the Nature of Debt to Third Parties
Madigan claims that PN Financial repeatedly revealed the nature of consumer debt to a debtor's family, friends, neighbors or employers. All are illegal.
A debt collector may legally contact an employer or other third party for the sole purpose of tracking down an elusive debtor. They may not contact third parties when they are already in contact with the debtor. Furthermore, any contact to a third party cannot reveal that a debt is owed.
Fronting as a Law Firm
PN Financial reportedly sent collection letters that insinuated that it was a law firm. To further intimidate debtors, the agency even provided false court case docket numbers on the letters.
By appearing to be a law firm, debtors falsely believed that they were being sued for debts. Panicking debtors were more motivated to avoid the possible consequences of
judgments, including bank levies and
wage garnishments.
Exceeding Authorized Debits
When some debtors provided access to their bank accounts, PN Financial debited more money than the debtor authorized. In many cases, cash-strapped debtors incurred numerous overdraft fees from their banks as a result.
Debt collectors are prohibited from drafting more than a debtor specifically authorizes. Debtors can protect themselves by sending money orders at regular intervals if they want to prevent unauthorized access to their checking accounts.
Unauthorized Credit Report Pulls
PN Financial did not have authorization to access debtors' credit reports. It did so as a method of intimidation.
Madigan stated that consumers "still have the right to be protected against illegal harassment and fraud." She seeks more than just fines or other penalties. Madigan intends to bar PN Financial from ever doing business in Illinois again.