Washington State Attorney General Bob Ferguson has filed a consumer protection lawsuit against a Renton-based collection agency that he says tried to scare people into believing that they could be sued for old debts.
Letters sent to debtors by Convergent Outsourcing gave the impression that Convergent could, and would, sue to collect, when it could not, according to the lawsuit filed this week in County Superior Court of King.
The letters did not reveal that the debts had passed the statute of limitations, which in Washington is six years from the date of the default or the last payment on the debt account, according to the lawsuit.
Convergent is a Renton-based collection agency with approximately 700 employees and $ 80 million in annual revenue that collects for debt buyers as well as for large corporations nationwide, including Verizon and PayPal, according to a statement on the lawsuit of the attorney general’s office.
The lawsuit alleges that Convergent violated consumer protection law and collection agencies law when it sent 75,466 deceptive “offer to settle” letters to consumers in Washington between January 2013 and February 2015.
In response to these letters, 3,292 Washington consumers made payments to Convergent on these old debts.
Convergent Outsourcing could not be reached for comment on Friday morning.
“Collection companies cannot use deception as a way to get around the law,” Ferguson said in an emailed statement about the lawsuit. “I intend to hold this large, sophisticated debt collection firm accountable for its illegal conduct that puts profits above the law.”
Debt collectors can legally try to collect old debts, but cannot sue for collection. According to the lawsuit, the letters from Convergent carried an implied threat that consumers could be sued if they didn’t pay, even if that wasn’t legally possible. This added “a false sense of urgency for consumers to respond,” Ferguson alleges.
The attorney general’s office has so far obtained three of the “settlement offer” letters Convergent sent to consumers in Washington. All three letters asked consumers to pay an average “settlement” amount of $ 300.
Ferguson’s lawsuit asks court to order Convergent to return to consumers in Washington and across the country all of the income it received on prescribed debts after sending out the “settlement offer” letters. “.
In September 2016, a panel of federal judges from the United States Court of Appeals for the Fifth Circuit ruled in another case – an individual consumer lawsuit against Convergent – that these Convergent letters could mislead consumers. debtors by making them believe that they could be sued for the debt.
The judges’ decision 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.