Collector Settles With Mass. AG, Pays $2.25M Fine

The Attorney General of Massachusetts has reached a settlement with a debt collection that will see the collector pay $2.25 million and agree to change its business practices after it was accused of violating the state’s law on call frequency, collecting on time-barred debts without disclosing that the debts were time-barred, and using false and misleading affidavits in lawsuits filed against consumers to collect on unpaid student loans.

A copy of the settlement in the matter of Transworld Systems can be accessed by clicking here.

Transworld neither admitted nor denied any of the allegations under the terms of the Assurance of Discontinuance, and issued a press release saying that the settlement not cause any “impact to daily operations, as the alleged conduct occurred over 4 years ago and is not a reflection of current practices. The Assurance resolves a legacy distraction and enables TSI to focus on providing superior service to its clients and consumers.”

The allegations, which detail activities that occurred between 2014 and 2017 included violating state law limiting the number of telephone calls that could be placed to a consumer’s place of employment to two times during a 30-day period, failing to disclose that certain debts were time-barred, and executing affidavits on behalf of student loan trusts that indicated the individual who executed the affidavit “had personal knowledge of facts about the debt alleged in the affidavit” when that was not the case.

The $2.25 million payment will be used to repay consumers, to be deposited into the General Fund for the Commonwealth of Massachusetts, to the Local Consumer Aid Fund, and for programs or initiatives designed to address the negative effects of unfair or deceptive practices related to debt collection.

“This company routinely violated state laws and regulations by harassing and misleading vulnerable, low-income consumers and student borrowers,” said Maura Healey, the AG of Massachusetts, in a statement. “One of my office’s top priorities is to protect the economic security of Massachusetts residents, and we will take action against companies that engage in illegal debt collection practices.”

Along with the fine, TSI has also agreed to reform its business practices so they comply with relevant laws and regulations.

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