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Attorney General Peter Kilmartin Announces Multi-State Settlement with Debt Collector NCO Financial Systems

Debt collector NCO Financial Systems, Inc. (NCOF) has agreed to change certain collections practices as part of a settlement announced today by Attorney General Peter Kilmartin and 18 other states. The settlement resolves concerns about NCOF's debt collection practices.

"Consumers deserve to be treated fairly and with respect by debt collectors," said Attorney General Kilmartin. "The Office of Attorney General will continue to hold these debt collectors feet to the fire to ensure they comply with all federal and state laws."

Since 2008, an Attorneys General multi-state working group, including Rhode Island, has investigated allegations of misleading and deceptive debt collection practices by NCOF.

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, consumer restitution will be available for three years following the effective date of the agreements. NCOF will set aside $950,000, or $50,000 for each of the 19 participating states, including Rhode Island, for consumers who have valid claims that meet one of the following criteria:

Consumer paid NCOF a third party debt that the consumer did not owe;

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

Consumer paid more on a third party debt than the amount NCOF agreed to settle the account.

Rhode Island consumers who believe they have a valid claim should please contact the Consumer Protection Unit of the Rhode Island Office of Attorney General at 401-274-4400 or by visiting

Valid claims will be submitted to NCOF and NCOF will provide payments to eligible consumers.

NCOF also has agreed to pay $575,000 for the states' consumer protection enforcement efforts. Rhode Island will receive approximately $26,000 from this settlement.

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