The state attorney general’s office filed a lawsuit against a Renton-based collection agency that asked people to “settle” their old debts after the statute of limitations expired. Of the more than 75,000 “offer to settle” letters sent to Washington residents, 3,292 people have made payments.
Convergent has approximately 700 employees and $ 80 million in annual revenue. The collection agency manages large corporate accounts like Verizon and PayPal. It also supports Palisades Collection, Galaxy Asset Purchasing, and Pinnacle Credit Services debt buyers.
The state estimates that Convergent has earned hundreds of thousands of dollars in costs to collect these prescribed debts in Washington, according to a press release from the attorney general’s office.
AG Bob Ferguson has filed a consumer protection lawsuit against Convergent Outsourcing for pushing consumers into settlements that have passed the statute of limitations for a collection action. Viewing payments as settlements meant Convergent was prepared to sue if people didn’t pay, the office argues.
Ferguson’s lawsuit says Convergent violated consumer protection law and the collection agency law when it sent 75,466 deceptive “offer to settle” letters to consumers in Washington.
In response to these letters, 3,292 Washington consumers made payments to Convergent on these old debts. 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. None of the letters disclosed that the debts had exceeded the statute of limitations.
The GA’s office has so far secured three of the “offer to settle” letters Convergent sent to consumers in Washington. These three letters asked people to pay an average “settlement” amount of $ 300.
Ferguson’s lawsuit asks court to order Convergent to return to those misled in Washington and across the country all of the income he received on prescribed debts after sending the collection letters “Offer to settle”. The exact amount will be determined as the trial continues.
In September 2016, a panel of federal judges from the United States Court of Appeals for the Fifth Circuit ruled in a consumer lawsuit against Convergent that these letters from Convergent could mislead anyone. one in error by making him believe that he could be sued for the debt and cheat the person.
The judges ruling states: “While it is not automatically illegal for a debt collector to demand payment of a prescribed debt, a collection letter violates the law. [Fair Debt Collection Practices Act] when his statements could mislead an uninformed consumer into believing that his prescribed debt is legally enforceable, whether or not litigation is threatened.
For more information on collection agencies, including what to expect when a collection agency contacts you, visit here.