by Patrick Lunsford – insideARM.com – October 7, 2011
The Minnesota Department of Commerce made public Thursday documents detailing enforcement actions against eight debt collection agencies doing business in the state. The actions primarily focused on hiring and accounting practices and
carried nearly $1 million in civil penalties.
The Minnesota Department of Commerce (DoC) said that that the companies
failed to properly screen potential employees, hired felons, engaged in shoddy
accounting practices, and failed to report to the DoC employee dismissals for
consumer harassment, all required by law in Minnesota.
In total, the DoC levied $930,000 in civil penalties against the firms, of
which $250,000 was stayed and $10,000 is in dispute. Seven of the eight agreed
to the penalties and to amend certain business practices, while one is fighting
Nearly all of the agencies named were charged with “failing to establish
adequate screening procedures when hiring individual collector applicants.” Most
were also charged with hiring applicants with criminal backgrounds. The charges also include failing to report dismissals for violations of debt collection regulations. Even if the companies properly fired employees for engaging in illegal debt collection practices, they were obligated to report the actions to the Department of Commerce, according to the agency.
Other charges included sloppy accounting practices that saw collection trust
accounts – the money to be remitted to clients – comingled with company
operations accounts. One company was also accused of improperly postdating
All of the collection agencies that signed consent orders agreed to amend
their business practices and pay penalties ranging from $40,000 to $300,000. Commercial Recovery Corporation did not sign a consent order and plans to
fight the charges.
The seven ARM companies that signed content orders are:
- Allied Interstate, LLC
- Bureau of Collection Recovery, LLC
- AllianceOne Receivables Management, Inc.
- Van Ru Credit Corporation
- IC System, Inc.
- General Revenue Corporation
- Nationwide Recovery Systems, LTD LP
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