A debt collection agency accused of training its staff to threaten small businesses in Minnesota has been fined a record $500,000.
Employees of Texas-based Tucker, Albin and Associates, Inc. pretended to be family members when calling business owners, claimed to be private investigators, and threatened to hire people to stand in front of businesses with signs saying they "didn't pay their debts," according to Minnesota officials.
On Tuesday, the Minnesota Department of Commerce announced the company has been hit with a $500,000 penalty – the largest ever imposed on a debt collector in the state – for its "deliberate, repeated misconduct."
The agency targeted more than 100 businesses in the Twin Cities and Greater Minnesota, including in Albert Lea, Alexandria, Nisswa, Osakis, Shakopee and St. Cloud, with farmers, restaurants, construction companies, body shops, a doctor and a veterinarian among the victims.
"Our Commerce Department investigation uncovered a pattern of deliberate, repeated misconduct in the company’s debt collection activities," Minnesota Commerce Commissioner Mike Rothman said. "As a matter of company policy, its debt collectors were trained and directed to deceive, harass and threaten small business owners to coerce payments from them."
Collectors 'spoofed' family phone numbers
The department launched its investigation after a complaint by a small business in Minneapolis, and found the company to be in violation of several state and federal laws in attempts to recover debts.
According to the department:
This includes a violation of the federal Truth in Caller ID Act, by "spoofing" the phone numbers of victims' family members or neighbors so that numbers would show up on caller ID instead of the company's phone number.
It trained collectors to pretend to be private investigators who threatened to take pictures of the business, run checks on vehicles in the parking lot and interview employees as they left. Employees also made threats they couldn't legally make, such as freezing a company's assets, having their insurance revoked and reporting them to the IRS.
The company will pay $130,000 of the fine up-front, with a further $10,000 paid in each of the next 12 months. The remaining $250,000 will be stayed for two years but will be levied if the company breaks a cease-and-desist order.
It has also been ordered to revise its practices and change its training procedures.
Company an 'industry leader'
Tucker, Albin & Associates describes itself on its website as an "industry leader" that "prides itself on demonstrating tact and professionalism while aggressively recovering debt."
It offers commercial and international debt recovery, as well as services for matters relating to fraud recovery, international arbitration and "complex international fraud."
Several complaints made against the company listed on the Better Business Bureau website accuse the company of misrepresentation, threats, and harassment.