DA Files $10 Million Lawsuit Against Debt Collection Giant

Santa Clara County’s District Attorney’s Office brought a $10 million lawsuit against a debt collection company for allegedly subjecting people to harassing phone calls—even when no money was owed.

The complaint filed jointly with three other district attorney’s offices claims that iQor US and its affiliate Allied Interstate bombarded cellphone numbers with unsolicited robo-calls, among other violations of consumer protection laws.

One San Jose man who owed no money to the debt collection giant was hounded by 126 calls in less than a month, according to prosecutors. A Sunnyvale man who also owed nothing to the company was called 88 times in a three-month span. He eventually blocked the number. Another San Jose resident got several calls a day at all three of his homes from a debt collector with the wrong name and number.

The complaint filed on behalf of all California consumers accuses the company of flouting the California’s Rosenthal Act and the state’s constitutional right to privacy as well as the federal Telephone Consumer Protection Act. Alleged violations include calling people before 8am and after 9pm and for trying to collect debts discharged through bankruptcy. It also charges the company with dialing cellphone numbers without subscriber consent, a practice prohibited under federal law.

In a statement earlier this week, the iQor said prosecutors were too quick to sue over since-retired debt collection tactics.

“Allied enjoys an A-plus rating from the Better Business Bureau, is currently under no material regulatory restrictions at the federal or state level and is committed to consumer protection both within the state of California as well as the rest of the country,” iQor and Allied officials wrote in a statement. “Allied looks forward to defending this matter and continuing to improve its collection practices as industry expectations evolve.”

This isn’t the first time iQor and its subsidiaries have come under regulatory scrutiny. Since 2004, the companies have been locked in litigation with state agencies throughout the country. In 2010, Allied shelled out $1.75 million to the Federal Trade Commission to settle claims that it harassed debtors and tried to collect money from the wrong people.

Prosecutors urge people who have been victims of unsolicited calls from iQor and Allied to call 619.531.3115.

Jennifer Wadsworth is the news editor for San Jose Inside and Metro Newspaper. Email tips to [email protected] or follow her on Twitter at @jennwadsworth.

2 Comments

  1. If Allied’s assertion that Allied enjoys an A+ rating from the BBB, someone should look into the BBB, given Allied’s past record of violations. If Allied’s assertion is false, the BBB should pursue legal action against Allied.

  2. If the District Attorney feels something like this deserves attention, why hasn’t he filed suit against the big banks, Wall Street financiers, and servicers who set up their own private real property transaction recording system in connection with the massive mortgage bubble, and apparently ripped off the Santa Clara County treasury of a far larger sum of money lost from fees owed the county Recorder’s Office for officially recording all transfers of interests having to do with real property during events leading up to the foreclosure frenzy 2008-2012.

    I wonder why he has chosen to protect the big banks, Wall Street financiers, and servicers who violated recording laws and sought to avoid paying legal fees to register and record real property transfers? Do big banks, etc., deserve his cutting them a break? That money is apparently still owed from banks all over the world along with Wall Street financiers and servicing companies.