$9 Mill Settlement Agreed To By S.C. Co., Mega Debt Collector

SAN JOSE, CA -- Following a 2 1/2-year legal battle, a global debt collection company is due to pay a $9 million debt of its own to settle a civil lawsuit filed by 18 California counties for subjecting people to harassing, illegal phone calls -- sometimes badgering those who owe nothing.

The agreement of the complaint filed against Allied Interstate by the Santa Clara County District Attorney's Office resolves one of the largest settlements of its kind. The embattled parent company IQor operating as Allied has offices all over the world faced federal and state violations of fair debt collections and consumer protection acts as well as invasion of privacy, the D.A. announced Wednesday.

In one case, a San Jose man received 126 calls in less than a month. He owed no money.

"It's not just irritating to get bombarded with these harassing calls, it's illegal," Santa Clara District Attorney Jeff Rosen said.

Beyond the penalty, the judgment orders the company to retrain employees in proper phone etiquette, conduct third-party audits and cease all business activity relating to:

• Making calls at an unreasonable frequency.
• Calling wrong numbers.
• Ignoring requests to keep calling.
• Using robo-dialing technology to call consumers' cell phones without consent.

The complaint was initially filed on behalf of Santa Clara, San Diego, Los Angeles and Riverside counties until San Mateo, Solano, Sonoma, Monterey, Marin, Orange, Ventura, Shasta, Yolo, Sacramento, Placer, San Bernardino, San Joaquin and Santa Cruz prosecutors joined the fight.

This civil suit marks the 11th law enforcement action filed against the debt collection company in over a decade.

"That is why we took a hard line (stand) on what they would pay," said Yen Dang, the Santa Clara supervising deputy district attorney. Santa Clara's judgment windfall was meant to serve as a deterrent.

In 2011, the company resolved another complaint with the Federal Trade Commission over similar practices by paying $1.75 million. This case was filed in U.S. District Court in Minnesota. Allied operates offices in the United States, Canada, India and the Philippines.

"Debt collectors had better make sure their information is accurate, or they could end up paying a big penalty," said David Vladeck, the FTC's Bureau of Consumer Protection director.

--Image via Shutterstock