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Boston, MA — The Massachusetts Division of Banks (Division) today announced a joint settlement 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.
The 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 – 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.
“Massachusetts 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,” said John Chapman, Undersecretary for the Office of Consumer Affairs and Business Regulation.
“This 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,” said Massachusetts Commissioner of Banks Terence McGinnis. “This specific examination aimed to determine the companies’ 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.”
Highlights of the agreement include:
The Division licenses over 400 debt collectors to operate in Massachusetts. 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.
In 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.
Consumers 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 www.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’s Consumer Money Matters webpage for tips to protect consumers from unlawful debt collection practices.
The 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. For more information visit the Division’s website at www.mass.gov/dob or contact the Division of Bank’s Consumer Hotline at 1-800-495-BANK (2265). For a list of recent Division enforcement actions and related fines, please click here.