National Credit Systems

The Fair Debt Collection Practices Act (FDCPA), enacted on September 20, 1977 is a consumer protection amendment that does not allow debt collectors to harass, oppress, or abuse anyone that they contact in the event they are attempting to collect a debt. The act also forbids debt collectors from using false, misleading, or deceptive practices, including misrepresentations about the debt, threats to do things that cannot legally be done, the amount of the debt, and false threats. 

These misleading practices are the focus of a recent lawsuit filed on July 3, 2019 against the Georgia-based collections agency National Credit Systems (NCS), the largest collection agency for apartment complexes in the nation. According to the lawsuit, not only did a representative for NCS violate the FDCPA on three separate occasions in 2016 when dealing with a former tenant from Denver, but the lawsuit also claims the company conspired to hide the recording evidence of the abusive behavior. 

Austin Caisse began receiving calls from NCS in regard to a debt owed to an apartment complex that he has since moved from. When Mr. Caisse questioned the representative for proof of the debt, called validation under the FDCPA, the representative responded that it was the responsibility of Mr. Caisse to provide that information, which is both incorrect and illegal. Caisse also claimed that the representative got hostile and aggravated during their phone calls and subsequently filed a complaint with Colorado Attorney General who then contacted the legal department of NCS for an investigation.

Ryan Baxter, NCS compliance investigator, initially claimed that NCS did not violate the law in its dealings with Caisse, however once he was asked to provide copies of the recordings of their interactions by the Attorney General, and Baxter listened to the recordings, he suspected that the NCS representative did in fact violate the FDCPA. When Baxter approached his boss, Ron Sapp, the Vice President of Operations at NCS, with the information, Baxter claims he was told that “that we should write the Attorney General back and tell them that we had lost the call recordings”. 

Baxter, who was studying for the Georgia Bar Exam at the time of the alleged violations, says he refused to lie to the state attorney general according to the lawsuit against NCS. The lawsuit also alleges that NCS takes part in the practice of keeping a portion of the money it collects on behalf of its clients, the apartment complexes.

According to Baxter, when an apartment complex sues a former tenant, NCS, which operates on a contingency basis, splits the decision with the apartment complex. If payments are made late, interest would be accumulated which NCS would then pocket, even though the judgments were made in the name of their clients (apartment complexes) and the clients were not informed of this practice.

While NCS claims this amount was “inconsequential”, the lawsuit claims this amount could be upwards of one million dollars. NCS also states that their contracts allow them to keep 100% of the interest payments made to their clients. However, when pressured to provide the appropriate clause in the contracts, NCS President Joel Lackey stated that “the fee clause in our agreement is silent on this subject” and refused to release the total dollar amount that NCS has collected in interest payments. Interestingly, since the lawsuit has been filed, at least one major client of the debt collection agency has demanded an explanation on this practice. 

Lackey admits that “the collections industry has more than its fair share of bad apples. There’s no doubt about it. We’re not one of them” and claims that NCS has worked above-board, in complete compliance with the law, and in the best way to serve their customers. 

If a debt collector has been contacting you, you do have rights. For example, debt collectors cannot call you outside of the hours of 8AM-9PM, unless you allow them to do so. They may only contact you at work if allowed to do so and they may not identify themselves as debt collectors to your employer. 

If you wish to have a debt collector cease contacting you, you or your lawyer can send a letter asking them to stop contact. Debt collectors are also required by law to provide specific information regarding your debt within five days of first contacting you, including the amount of the debt, the name of the person or company you owe the money to, a statement that the debt is assumed correct unless you dispute it within 30 days, and instructions on how you can dispute the debt. 

If the debt collector does not provide this information, or they take aggressive collection practices, such as threatening you, pretending to be a lawyer, lead you to believe you committed a crime, or threatening your arrest, you may have the ability to sue under the FDCPA. It is important to keep all documentation regarding your case and consider contacting a lawyer immediately to avoid losing your ability to sue under the statute of limitations, which is one year from the time the debt collector broke the law.

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