Nationwide Credit to Pay $1 Million to Settle Charges

Nationwide Credit Inc. will pay a record $1-million civil penalty to resolve charges that it violated federal law by harassing and abusing consumers who owed money, the Federal Trade Commission said Tuesday.

The Atlanta company’s payment is the largest ever in a debt-collection case, the FTC said.

The FTC alleged that Nationwide’s bill collectors had used obscene language and harassed consumers with repeated telephone calls. The bill collectors falsely implied that consumers could be arrested or have their wages garnisheed.

Nationwide bill collectors tried to collect debts that consumers disputed in writing without bothering to verify the debts. And without permission from consumers, bill collectors sought information from employers, neighbors and children.

Kevin Henry, Nationwide Credit’s senior vice president of human resources, said the company was sold in December and that the previous owners would pay the fine. “We are indemnified,” he said, adding that the new management is changing the way the company does business.

Henry said the new owners had worked with the FTC to resolve the problems that had occurred under the previous ownership and had devised techniques to ensure they did not happen again.

The consent decree contains reporting and record-keeping requirements to permit the FTC to monitor compliance with the settlement. Among other things, the settlement includes a consumer complaint program developed by the company’s new owners and managers. People who have questions about debts owed to Nationwide can call a consumer response center at (800) 540-6364.

The FTC proposed the settlement on a 4-0 vote. The Justice Department filed the proposed decree in federal court in Atlanta on behalf of the FTC on Tuesday.

The abuses are similar to those that resulted in a 1992 consent decree under which the company paid a $100,000 fine to the FTC.