PATRICK L. MEEHAN

United States Attorney

By: 

Assistant United States Attorney

615 Chestnut St., Suite 1250

Philadelphia, Pennsylvania 19106

(215) 861-8200

 UNITED STATES DISTRICT COURT

 FOR THE EASTERN DISTRICT OF PENNSYLVANIA

 

 

UNITED STATES OF AMERICA, Case No.

 

Plaintiff, COMPLAINT FOR CIVIL PENALTIES,

v. INJUNCTIVE, AND OTHER RELIEF

 

NCO GROUP, INC., 

a Pennsylvania corporation, 

NCO FINANCIAL SYSTEMS, INC., 

a Pennsylvania corporation, and 

NCO PORTFOLIO MANAGEMENT, INC., 

a Delaware corporation. 

 

 Defendants. 

 /

Plaintiff, the United States of America, acting upon notification and authorization to the

Attorney General by the Federal Trade Commission (“Commission”), for its complaint alleges as

follows:

1. Plaintiff brings this action under Sections 5(a), 5(m)(1)(A), 13(b), and 16(a) of the

Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 45(a), 45(m)(1)(A), 53(b), and 56(a),

and the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681-1681u, to obtain monetary civil

penalties and injunctive or other relief for defendants’ violations of the FTC Act and the FCRA.

 JURISDICTION AND VENUE

2. This Court has jurisdiction over this matter under 28 U.S.C. §§ 1331, 1337(a), 1345,

and 1355, and under 15 U.S.C. §§ 45(a), 45(m)(1)(A), 53(b), 56(a), 57b, and 1681s.
2

3. Venue is proper in the United States District Court for the Eastern District of

Pennsylvania under 28 U.S.C. §§ 1391(b) - (c) and 1395(a), and 15 U.S.C. Section 53(b).

 DEFENDANTS

4. Defendant NCO Group, Inc., is a for-profit corporation organized, existing, and doing

business under the laws of the State of Pennsylvania. Its principal place of business is located at 507

Prudential Road, Horsham, Pennsylvania 19044. At all times relevant to this complaint, defendant

NCO Group, Inc., has transacted business in this district.

5. Defendant NCO Financial Systems, Inc., is a for-profit Pennsylvania corporation with

its principal place of business located at 507 Prudential Road, Horsham, Pennsylvania 19044. NCO

Financial Systems, Inc., transacts business in this district.

6. Defendant NCO Portfolio Management, Inc., is a for-profit Delaware corporation

with its principal place of business located at 1804 Washington Boulevard, Montgomery Park

Business Center, Baltimore, Maryland 21209. NCO Portfolio Management, Inc., transacts business

in this district.

7. Defendant NCO Group, Inc., dominates or controls the operations of defendants NCO

Financial Systems, Inc., and NCO Portfolio Management, Inc.

8. Defendant NCO Financial Systems, Inc., is a “debt collector” as that term is defined

in Section 803(6) of the FDCPA, 15 U.S.C. § 1692a(6). As part of its debt collection activities,

defendant furnishes information to consumer reporting agencies. As such, defendant is subject to

Section 623 of the FCRA, 15 U.S.C. § 1681s-2, which imposes a series of duties and prohibitions

upon any person or entity that furnishes information to a consumer reporting agency. 
3

 THE FAIR CREDIT REPORTING ACT

 9. The FCRA was enacted in 1970 and became effective on April 25, 1971, and has

been in force since that date. In 1996, the FCRA was amended extensively by Congress. Among

other things, Congress added Section 623(a)(5) to the Act, which became effective on October 1,

1997. 

10. Section 621 of the FCRA, 15 U.S.C. § 1681s, authorizes the Commission to use all

of its functions and powers under the FTC Act to enforce compliance with the FCRA by all persons

subject thereto except to the extent that enforcement specifically is committed to some other

governmental agency, irrespective of whether the person is engaged in commerce or meets any other

jurisdictional tests set forth by the FTC Act. 

 VIOLATIONS OF THE FAIR CREDIT REPORTING ACT

11. Section 623(a)(5) of the FCRA requires anyone furnishing information to a consumer

reporting agency regarding a delinquent account that has been placed for collection, charged to

profit or loss, or subjected to any similar action, to provide to the consumer reporting agency, not

later than 90 days after furnishing the information, the month and year of the commencement of the

delinquency that immediately preceded the action. 

12. In the course of their business, defendants failed to comply with the requirements of

section 623(a)(5) in that, for a period of time, they reported dates of delinquency to credit reporting

agencies, including delinquency dates for accounts previously collected by Commercial Financial

Service, Inc., on behalf of Global Rated Eligible Asset Trust, Securitized Multiple Asset Rated Trust

1997-5, and Securitized Multiple Asset Rated Trust 1997, that were later than the month and year

of the commencement of the delinquency.
4

13. The acts and practices alleged in Paragraph 12 constitute violations of Section

623(a)(5) of the FCRA, 15 U.S.C. § 1681s-2(a)(5). Pursuant to Section 621(a)(1) of the FCRA, 15

U.S.C. § 1681s(a)(1), the acts and practices alleged in Paragraph 12 also constitute unfair or

deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).

 CIVIL PENALTIES AND INJUNCTIVE RELIEF

FOR VIOLATIONS OF THE FAIR CREDIT REPORTING ACT

14. Defendants have violated the FCRA as described above, with actual knowledge or

knowledge fairly implied on the basis of objective circumstances, as set forth in Section 621(a)(2)

of the FCRA, 15 U.S.C. § 1681s(a)(2).

15. Section 621(a)(2) of the FCRA,15 U.S.C. § 1681s(a)(2), authorizes the Court to

award monetary civil penalties of not more than $2,500 per violation of Section 623(a)(5).

16. Each instance in which defendants reported a later than actual delinquency date in

violation of Section 623(a)(5) of the FCRA, 15 U.S.C. § 1681s-2(a)(5), since October 1, 1997, the

date that Section 623(a)(5) went into effect, constitutes a separate violation of the FCRA for which

plaintiff seeks monetary civil penalties under Section 621 of the FCRA, 15 U.S.C. § 1681s.

17. Under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), this Court is authorized to

issue a permanent injunction prohibiting defendants from violating the FTC Act and the FCRA,

including violations of Section 623(a)(5).

PRAYER FOR RELIEF

WHEREFORE, plaintiff respectfully requests that the Court, pursuant to 15 U.S.C. §§ 45(a),

45(m)(1)(A), 53(b), and 1681s, and pursuant to this Court’s own powers:

1. Enter judgment against defendants and in favor of plaintiff for each law violation 

 alleged in this Complaint;
5

2. Award plaintiff monetary civil penalties for each violation of the FCRA as alleged

in this complaint;

3. Enjoin defendants from violating Section 623 of the FCRA; 

4. Award plaintiff such additional relief as the Court deems just and proper.

 

Dated:

FOR THE UNITED STATES OF AMERICA:

PETER D. KEISLER PATRICK L. MEEHAN

Assistant Attorney General, Civil Division United States Attorney

U.S. Department of Justice Eastern District of Pennsylvania

EUGENE M. THIROLF 

Director

Office of Consumer Litigation Assistant United States Attorney

 615 Chestnut St., Suite 1250

 Philadelphia, Pennsylvania 19106

ELIZABETH STEIN (215) 861-8200

Attorney, Office of Consumer Litigation

Civil Division, U.S. Department of Justice

Washington, D.C. 20530

(202) 307-0486