State Accuses Collection Agency of ‘Strong-Arm Tactics’ With Debtors

A Northern California-based collection agency with an office in Tarzana has been accused of using illegal “strong-arm tactics,” including threats to break debtors’ legs, according to documents filed by the state attorney general’s office.

In a civil complaint filed Wednesday in Marin County Superior Court by Deputy Atty. Gen. Christopher Ames, the P.W.I. Collection Agency, which is headquartered in San Rafael, was charged with engaging in unlawful business practices and unfair competition since July 1982.

The state is seeking an injunction to stop the alleged practices, and penalties of $250,000.

Misrepresentation Alleged

Collectors used rude, insulting and obscene language in phone conversations to people who owed money, the complaint says. The collectors also told debtors that they were “coming over to get” them, or that they would make debtors “limp home” if they did immediately come down to the office and pay their bills, according to the complaint.

P.W.I. collectors also represented themselves as attorneys or government officials, repeatedly called debtors at work or at home at all hours, and threatened to inform friends or relatives about debts, the complaint says. In a few cases, friends or relatives of debtors allegedly were coerced by the collectors to pay the amount owed.

“Because of the money and percentages involved, there is a tremendous incentive for individual collectors to go beyond the law, and collectors at P.W.I. were encouraged to use these kinds of strong-arm tactics,” Ames said.

Ames said the practices were used at the collection agency’s three offices in San Rafael, San Francisco and on Ventura Boulevard in Tarzana.

P.W.I. co-owner Richard Williams issued a statement Thursday calling the complaint “totally lacking in merit or substantive evidence.”

“These charges mainly have been brought by former employees of P.W.I. who were terminated and sued the agency on wrongful termination suits,” P.W.I. attorney E Rick Buell said in an interview. “They threatened us when we let them go that they would bring P.W.I. to its knees, and this is just part of their whole tactic.”

‘Prohibited’ Methods

The complaint includes statements from seven former employees of the collection agency, none of them from the San Fernando Valley office. Ames said the complaint also was based on other information, including data from the Bureau of Collection and Investigative Services, a branch of the state Department of Consumer Affairs.

One former P.W.I. employee, Spero Somkopoulos, who worked at the collection agency from July, 1982, until August, 1984, said agency officials would urge collectors to use whatever means necessary to induce debtors to make payments “even if those methods were prohibited by the rules regulating debt collection practices,” according to the court documents.