Debt collectors pay Minnesota $100K for student loan harassment

Two companies made "abusive and harassing phone calls" to debtors.

Minnesota will receive $100,000 from a debt collection agency that made abusive and harassing phone calls in order to increase student loan repayments.

Five states including Minnesota sued two subsidiaries of iQor Holdings for improper debt collection practices, with each state receiving an equal share of the $500,000 settlement.

Staff working for iQor carried out debt collection practices that "deliberately violated consumer protection laws to boost payments and meet revenue targets," Minnesota Commerce Commissioner Mike Rothman said on Friday.

One of the subsidiaries, Allied Interstate, collects student loan debt for the federal government and private financial institutions.

Workers would continue to call consumers whose phone numbers had previously been marked "Do Not Call" and would also call them at their place of work, which is prohibited under debt collection laws.

It also failed to "promptly" credit debtor's accounts when it received payment checks, which Rothman said was an "unfair and deceptive practice."

Allied Interstate and the other subsidiary, The Receivable Management Services Corporation, have agreed to reform their debt collection, compliance and financial practices following the settlement.

“This settlement will ensure that the company changes how it does business so consumers are protected against abusive calls and other unfair treatment," Rothman said.

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