The Massachusetts Division of Banks (Division) today announced a joint\u00a0settlement\u00a0 with financial regulators of four other states and two subsidiaries of IQor Holdings Inc. for their failure to comply with state and federal consumer protection laws related to debt collection practices. The agreement requires corrective actions by the two companies and a settlement payment of $500,000 to be distributed equally among the five states.\n\nThe settlement agreement is the result of a multi-state examination of debt collection practices at Allied Interstate, LLC, and The Receivable Management Services Corporation and its wholly owned subsidiary Receivable Management Services \u2013 Recovery Division LLC (RMS). The participating state agencies joining Massachusetts in this effort include the Connecticut Department of Banking, Idaho Department of Finance, Minnesota Department of Commerce, and North Dakota Department of Financial Institutions. The exam review period covered collection activity over a two-year period between February 11, 2013 and February 27, 2015. Additional operations and activities outside this time frame were also considered.\n\n\u201cMassachusetts residents should take comfort knowing not only that they have rights against egregious debt collection practices, but also that the Division of Banks will not hesitate to use its authority to enforce consumer protection laws and regulations in this arena. This settlement is a clear indication that poor business practice and violations against consumers will not be tolerated in Massachusetts,\u201d said John Chapman, Undersecretary for the Office of Consumer Affairs and Business Regulation.\n\n\u201cThis first of its kind multi-state settlement for improper debt collection practices highlights the collaborative nature of the state regulatory system. Division staff joined forces and resources with other regulators to examine a national debt collector to protect consumers in our home states,\u201d said Massachusetts Commissioner of Banks Terence McGinnis. \u201cThis specific examination aimed to determine the companies\u2019 compliance with applicable laws, the financial condition of the company, and supervision controls of licensed debt collection activities. The violations discovered warranted the appropriately significant penalty.\u201d\n\nHighlights of the agreement include:\n\nDuring October-December 2015, Allied Interstate violated federal and state consumer protection requirements, including the Fair Debt Collection Practices Act, and its own compliance policies that limit contact with third parties or with consumers at their places of employment in an effort to meet revenue goals. Specifically, collection agents were directed to call phone numbers that had previously been marked as \u201cDo Not Call\u201d and to document the accounts \u201cREHAB PUSH\u201d to avoid potential disciplinary action.\n\tAllied Interstate also engaged in unfair and deceptive practices by failing to promptly credit debtor accounts upon receipt of payment by check.\n\tBoth Allied Interstate and RMS failed to provide timely, full access to all collection records. They also failed to submit complete responses to requested information in a timely manner.\n\tIn addition to the $500,000 settlement payment, the two companies have agreed to reform their debt collection, compliance and financial practices. These reforms include:\nEnhancing oversight and monitoring to ensure an effective compliance management system;\n\tTraining all management, individual collectors and related support staff about the company\u2019s whistleblower policy;\n\tMaintaining an effective compliance audit program to verify adherence to state and federal consumer protection requirements and to identify compliance deficiencies;\n\tEnsuring that debt collection operations do not include any unfair, deceptive or abusive practices;\n\tEnsuring that debt collection operations do not include harassment of third parties or consumers at their places of employment in an effort to meet revenue goals; and\n\tImproving oversight and monitoring of payment processing activity to ensure payments are properly credited to debtor accounts in a timely manner.\nThe Division licenses over 400 debt collectors to operate in Massachusetts.\u00a0 Licensed debt collectors must demonstrate financial responsibility and show they possess the character, reputation, integrity and fitness to engage in the business of a debt collector in an honest, fair, sound, and efficient manner. The Division conducts regular examinations of licensed debt collectors to determine compliance with state and federal consumer protection requirements governing debt collectors, including prohibitions on harassment or abuse; false, deceptive, or misleading representations; third party disclosure; and other unfair practices.\u00a0\n\nIn addition to the formal regulatory action reported today, the Division also issues confidential informal regulatory actions to correct non-compliant collection practices, as well as issuing cease directives against unlicensed debt collectors operating in Massachusetts.\n\nConsumers are encouraged to inform themselves of rules governing third-party debt collection, including many important consumer protections such as the limits on how often and when a collector can contact a debtor. Please refer to the Division of Banks website at\u00a0www.mass.gov/dob, for additional information including instructions on how to file a complaint and information relative to the license application requirements. Please visit the Division\u2019s\u00a0Consumer Money Matters\u00a0webpage for tips to protect consumers from unlawful debt collection practices.\n\nThe Division of Banks is an agency within the Office of Consumer Affairs and Business Regulation which oversees state-chartered banks and credit unions, sales finance companies, check sellers, debt collectors, foreign transmittal agencies, mortgage lenders and brokers.\u00a0For more information visit the Division\u2019s website at\u00a0www.mass.gov/dob\u00a0or contact the Division of Bank\u2019s Consumer Hotline at 1-800-495-BANK (2265). For a list of recent Division enforcement actions and related fines, please click\u00a0here.