Robocalls cost debt collector $9 million
One San Jose man received 126 calls
SAN JOSE >> One of the nation’s largest debt-collection companies has agreed to pay $9 million to settle a lawsuit alleging that it harassed consumers in 18 California counties from San Jose to San Diego with thousands of robocalls.
Among the many victims was Morgan Hill resident Dennis Badagliacco, who spent more than a year trying to fend off incessant calls for a “Mr. Roberts.” He said he tried being nice. He tried yelling. But nothing stopped him from being relentlessly bombarded — at home, his realty office, vacation house and on the road.
“We could not leave a phone plugged in because it would fill up with voice mail,” he said, adding he was pleased by the lawsuit and settlement. “I was very happy to see the DA was prosecuting, and I’m hoping other consumers won’t be beat up like this as a result.”
Americans were besieged in August alone with a record 148.8 million intrusive automated messages — per day — according to YouMail, a robocall blocking service that collects and analyzes data. That’s 1.6 calls a second, or an average of 13 calls per person per month, though many people get far more. It’s no wonder an increasing number of people let most of their calls go straight to voicemail.
The settlement resolves a civil complaint the prosecutors against IQor Holdings and one of its subsidiaries, Allied Interstate. The complaint was originally filed by Riverside County District Attorney's Office. Three other big district attorneys in big urban counties then signed on, including Santa Clara, San Diego and Los Angeles. Eventually, other counties joined, including Solano, Sonoma, Santa Cruz, and San Mateo.
“It's not just irritating to get bombarded with these harassing calls, it's illegal,” Santa Clara County District Attorney Jeff Rosen said. “We will vigilantly protect the consumer rights of Santa Clara County residents.”
In a statement, Allied Interstate noted that the settlement involves no admission of liability or finding of wrongdoing.
“The case centered on calls that Allied placed to certain California debtors dating back to 2011 using its former dialing system and turned on evolving interpretations of laws governing our industry,” it said. “Allied maintains that such calls were lawful, and the policies have long been retired and new leadership appointed. iQor is committed to consumer protection and continually improving its compliance practices.”
However, it was the 11th law enforcement action against the company in over a decade, according to prosecutor Yen Dang, who supervises the consumer protection unit in the Santa Clara County District Attorney's Office. Prior to the settlement, though, the largest payout was $1.75 million to the Federal Trade Commission. Last year, the company paid $500,000 to settle a lawsuit brought by five other states.
“None of the other actions had reached over a million, except for the FTC,” Dang said. “We just did not give up.”
The settlement requires the company to provide training about the calling rules to employees, maintain records of calls and complaints, and conduct a third-party audit annually for the next five years to test compliance.
Of the $9 million, $1 million will cover the government's legal expenses. The remaining $8 million will be divided among all the counties, with the big four counties each receiving $1.6 million, and the rest divided among the other jurisdictions.
The money must be used to investigate alleged violations of consumer protection laws.