Office of the Attorney General
Attorney General Conway Announces Multi-State Settlement with NCO Financial Systems over Debt Collection Practices

Press Release Date:  Monday, February 06, 2012  
Contact Information:  Shelley Catharine Johnson
Deputy Communications Director

Attorney General Jack Conway today announced that Kentucky joined with 18 other states in a settlement with NCO Financial Systems, Inc. (NCOF) to resolve concerns about NCOF's debt collection practices. The settlement was filed today in Franklin Circuit Court.

"I am pleased that NCOF has agreed to change certain collections practices as part of this settlement," General Conway said. "Consumers should pay their valid debts; however, in doing so they should not be treated unfairly or be subjected to abusive collection practices. This settlement will be a valuable tool in ensuring that this debt collector complies with debt collection laws."

Consumers complained to the Attorney General's Office about multiple practices such as repeated calls about someone else's debt, calling after being asked to stop calling, discussing a consumer's alleged debt with someone else, collecting on a debt that the consumer did not owe or had already repaid and threatening to have a debtor arrested.

In the settlement, NCOF agrees to:

  • Comply with the federal Fair Debt Collection Practices Act, the federal Fair Credit Reporting Act, and all applicable state laws.
  • For debts reported to the credit reporting agencies, notify the credit reporting agencies within 30 calendar days of (1) any verbal or written consumer dispute or (2) receiving the results of an investigation into the accuracy or completeness of previously reported information.
  • Provide notice to consumers about their debt collection rights under federal and state law.
  • Monitor compliance, including training and monitoring its representatives and independent contractors, creating written policies and procedures for handling consumer complaints, and submitting compliance reports to the states every 6 months for 18 months.

Additionally, a special consumer restitution procedure will be available for three years following the effective date of the agreement. NCOF will set aside $950,000, which is $50,000 for each of the 19 participating states, for consumers who have valid claims that meet one of the following criteria:

  • The consumer paid NCOF a third party debt that the consumer did not owe;
  • The consumer overpaid interest on a third party debt that was not supported by the underlying agreement between the debtor and the original holder of the debt or as otherwise permitted by law; or
  • The consumer paid more on a third party debt than the amount NCOF agreed to settle the account.

Kentucky consumers who believe they have a valid claim for restitution, or who have other complaints about the collection of accounts by NCOF, may file a consumer complaint with the Kentucky Attorney General's Office of Consumer Protection. To access a consumer protection complaint form, please visit or call 1-888-432-9257 (choose option 3) or 502-696-5389. Claims for restitution under this settlement should be marked "NCOF Restitution Claim". Valid claims will be submitted to NCOF, and NCOF will have 30 days to make refunds to eligible consumers. This special restitution procedure does not limit the rights of consumers to seek restitution or pursue any other remedy provided by law.

Keep in mind this general information if you are contacted by a third-party debt collector:

  • You may dispute the validity of the debt and make a written request for verification of the debt.
  • If you want collection calls to stop, you can ask them to stop calling you, and you should send a written request asking them to stop.
  • In general, third party debt collectors cannot:
    • lie about who they are or what you owe;
    • add charges or fees you have not already agreed to or that were not part of your agreement with the original debtor;
    • threaten arrest;
    • say you will be sued or have a garnishment put on your wages and accounts if that is not true;
    • repeatedly call to annoy you, or call you before 8 a.m. or after 9 p.m.
  • Visit the Federal Trade Commission's website for more information about federal debt collection practice laws

The multi-state working group was led by Ohio, and in addition to Kentucky included: Alaska, Arkansas, Idaho, Illinois, Iowa, Louisiana, Michigan, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, Vermont, and Wisconsin.

Link to copy of the Assurance of Voluntary Compliance: