What to Know
- An LA judge approved strict phone call parameters for one of the largest third-party debt collection companies operating worldwide.
- The settlement is for $9 million.
- The suit alleged that Allied Interstate, iQor and affiliated firms engaged in illegal debt collection practices.
A Los Angeles judge approved a $9 million civil settlement that sets strict phone call parameters for one of the largest third-party debt collection companies operating worldwide, it was announced Wednesday.
The settlement, believed to be among the largest of its kind, stems from a lawsuit filed by the district attorneys of Los Angeles, Riverside, San Diego and Santa Clara counties against Allied Interstate LLC and its parent company, iQor Holdings Inc.
It was the 11th law enforcement action filed against the defendants over a period of 10 years, according to the plaintiffs.
"California law protects all consumers, even those who are behind in their payments, from constant harassing phone calls," Los Angeles County District Attorney Jackie Lacey said. "We will strictly enforce laws designed to protect consumers from illegal and abusive phone-calling practices."
The suit alleged that Allied Interstate, iQor and affiliated firms engaged in illegal debt collection practices that violated California's Rosenthal Fair Debt Collection Practices Act, the federal Debt Collection Practices Act and the federal Telephone Consumer Protection Act by:
- calling consumers with excessive frequency, sometimes hundreds of times and sometimes calling the wrong person numerous times;
- Failing to cease calling even when advised that they had reached a wrong number; and
- using a robo-dialer, known as a "predictive dialer," to place calls to the cell phones of consumers without their consent.
Los Angeles County Superior Court Judge Barbara M. Scheper, who approved the settlement Tuesday, ordered Allied and iQor to immediately cease those practices and to provide training about the calling rules for employees who make debt collection calls, maintain records of calls and complaints, and conduct an annual third-party audit to ensure compliance with the settlement provisions for five years.
The district attorney's offices of San Diego, Los Angeles, Riverside and Santa Clara counties filed the suit on Sept. 14, 2016, in Los Angeles Superior Court after a 1 1/2-year investigation. Fourteen other California county district attorney's offices later joined as plaintiffs in the case.
The monetary judgment includes $8 million in civil penalties to be paid over two years, plus $1 million to reimburse prosecutors for the costs of investigating and filing the case. It was unclear how the judgment would be split among the plaintiffs.