It’s one thing to read news and simply acknowledge the article as containing something of interest.  It’s quite another experience to read an article, ponder it and think about the “story behind the story.”  In this case, I am thinking about the article that I read reading West Asset Management. This is a fairly large collection agency that operates in 13 states.  It has been hit by the Federal Trade Commission with a record fine of $2.8 million for its violations of the Fair Debt Collection Practices Act.  I don’t understand how this could have happened to a large and seemingly reputable collection agency?

According to the FTC, some of the company’s practices included repeatedly calling consumers with the intent to harass, illegally revealing debts to third parties and misrepresenting itself as a law firm that would garnish wages, sell consumers’ properties or have them arrested or jailed if they did not pay.  The company also falsely claimed that partial payments would be accepted as full settlements, the FTC said.

Here is my problem….Why did this happen?  How did this happen?  I don’t think that a collection agency gets to be that large and operate in that many states without doing a number of things RIGHT.  Think about it.  This company is not a fly by night operation.  It operates in 13 states and there were no allegations by the FTC that it was doing so illegally.  So what the hell happened?  It would be very easy to simply dismiss West Asset Management as a sleazy operation.  I refuse to do so because to operate in as many states as it does, it had spent a pile of money on legal fees to do so.  I can’t believe that it received a pile of bad legal advice along the way.  I am even more convinced that it intended to do things the right way.  So, again…what the hell happened?

I think that a number of theories should be examined. Remember, those who don’t study history are condemned to repeat it.  I have no intention of committing any acts that the FTC finds so objectionable as to fine me for $2.3 million.  I assume you don’t wish to make this mistake either so lets think about what happened at West Asset Management so that we don’t make the same mistakes.

One theory that I have  is that Wests’ collection agency managers were asleep at the wheel.  They were not monitoring the calls made by their collectors. This is a possible but unlikely theory.  The managers had to have received some complaints along the way and even if they only mildly astute, they would have noticed a pattern amongst the complaint or the collectors who were the subject of these complaints.

Another theory I have is that the agency managers are compensated based upon what their collectors collect and hence have an incentive to break the law. Using the “follow the money trail” to explain the unexplained, this theory gets my vote.  The collection agency managers may have been afraid to disrupt the cash flow that addressing these FDCPA violations was creating.  This would have meant that the collection agency managers were required to choose between their wallets and consumer’s rights.  If this theory were the reason why West Asset Management was fined by the FTC, then the collection agency managers made a bad decision

Another theory I have  as to why West Asset Management got spanked is that it did not train its debt collectors thoroughly enough to avoid breaking the law. From my experience I can tell you that this happens a lot.  Many collection agencies do not pay enough time and money into collector training.  The FDCPA is not a very complicated statues, but it does take some time to read an understand it.  Agencies that don’t spend money training their collectors had better save up money for defense attorneys’ fees because I can almost guarantee you that an agency is going to spend that money one way or the other.

Unfortunately for us, these are all only theories as to why West Asset got fined by the FTC.  Fortunately for us, these theories are good places for you to start examining your collection practices and your agency’s practices.  The FTC may be based in Washington, but from personal experience, I can tell you that you should not underestimate its reach.

Attorney Gary Nitzkin is a profession debt collector with the Law Offices of Nitzkin and Associates, Debt Collection Attorneys.  If have commercial debts that you need collected or have questions about debt collection issues or tactics, please call or email Attorney Gary Nitzkin at (888) 293-2882.  Visit us at www.creditor-law.com.