Debt collector to reimburse Washington consumers $ 1.6 million
WASHINGTON – Attorney General Bob Ferguson announced on Wednesday that Renton-based collection agency Convergent will pay more than $ 1.6 million for deceptive letters it sent to Washingtonians.
According to the attorney general’s office, the letters contained “settlement offers” to settle debts, including student loans, but did not disclose that Convergent could not assert the debt in court.
The term “settlement offer” misleadingly suggested the possibility of litigation to collect the debt, Ferguson’s office said. As a result of the Attorney General’s case, the 1,405 Washingtonians who sent money to Convergent will get the money they sent to the company, plus interest, for a total of nearly 710,000. $.
Payments will range from around $ 9 to over $ 20,000. These payments will reflect the amount paid by Washingtonians and will include interest accrued since 2014.
Payments from the attorney general’s office will begin to flow to affected consumers over the next two to three months, Ferguson said in a press release. People don’t have to do anything to receive this money.
In Washington, the limitation period for debt collection lawsuits is six years from the date of default or the last payment on the debt account. Once a debt has passed the statute of limitations, debt collectors can still attempt to collect those debts, but they cannot take legal action. According to the attorney general’s office, none of Convergent’s 80,285 letters to Washingtonians revealed that the debts had exceeded the statute of limitations, which Ferguson said violated state consumer protection law.
“Debt collectors are not allowed to deceive Washingtonians,” Ferguson said. “Today’s resolution holds this large, sophisticated debt collection firm accountable for its illegal conduct that places its profits above the law.”
Convergent has approximately 700 employees and $ 80 million in annual revenue. It has been collected from accounts at large corporations across the country including Verizon, Sprint, T-Mobile, Dish Network, and PayPal, as well as debt buyers like Palisades Collection, Galaxy Asset Purchasing, and Pinnacle Credit Services.
Ferguson filed a consumer protection lawsuit against the company in June 2020 for sending out ‘settlement’ offer letters that gave the misleading impression that Convergent could sue people for past debts while she couldn’t. The letters implied that Convergent would sue if people didn’t pay.
As part of Wednesday’s deal, Convergent agreed to a nationwide injunction that will ban it from using the words “settlement” or “settlement” when attempting to collect prescribed debts. The agreement requires the company to disclose that the statute of limitations for suing the debt has expired.
In total, Convergent will donate $ 1,675,000 to the Attorney General’s office, including payment to cover the costs of the case and fund future investigations and enforcement of the Consumer Protection Act.