UNITED STATES DISTRICT COURT t- i..: :- '\ ~,. " ; :' ,; ,_ ' 1 

FOR THE MIDDLE DISTRICT OF FLORIDA I" "';\JLl: ; ','; :; i L ur\lJ A 

1:"Mr,\, F Lt.;KiJA 

UNITED STATES OF AMERICA, 

Plaintiff, Case Number: <?: i:1-CA! - I <t;)-T-).16 A J 

v. Judge: 

ASSET ACCEPTANCE, LLC, 

a Delaware limited liability company, 

Defendant. 

COMPLAINT FOR CIVIL PENALTIES, INJUNCTIVE 

AND OTHER RELIEF 

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

Attorney General by the Federal Trade Commission ("Commission"), by its undersigned 

attorneys, for its Complaint, alleges as follows: 

JURISDICTION AND VENUE 

1. This is an action arising under Sections 5(a), 5(m)( 1 )(A), I3(b), and 16(a) of the 

Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 45(a), 45(m)(I)(A), 53(b), and 56(a); 

the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ I68I~168Ix; and the Fair Debt Collection 

P~actices Act ("FDCP A"), 15 u. S.C. §§ 1692-1692p, to obtain monetary civil penalties, a 

permanent injunction, restitution, disgorgement, and other equitable relief for Defendant's 

violations of Section 5 of the FTC Act, the FCRA, and the FDCP A. 

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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)(I), 45(m)(1)(A), 53(b), 1681s, and 1692/. 

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

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

PLAINTIFF 

4. This action is brought by the United States of America on behalf of the Federal 

Trade Commission. The Commission is an independent agency of the United States 

government given statutory authority and responsibility by the FTC Act, 15 US.C. §§ 41-58. 

The Commission is charged, inter alia, with enforcing Section 5(a) of the FTC Act, 

15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce; 

the FCRA, 15 U.S.C. §§ 1681-1681x, which imposes duties upon consumer reporting agencies 

and those who furnish information to a consumer reporting agency or use information obtained 

from a consumer reporting agency; and the FDCPA, 15 U.S.C. §§ I 692-1692p, which imposes 

duties upon debt collectors. 

DEFENDANT 

5. Asset Acceptance, LLC ("Asset," or "Asset Acceptance"), is a Delaware limited 

liability company with its principal place of business located at 28405 Van Dyke Avenue, 

Warren, Michigan 48903. It operates four call centers, one of which is located at2840 South 

Falkenburg Road, Riverview, Florida 33578. Asset Acceptance is a wholly-owned subsidiary of 

Asset Acceptance Capital Corp. At all times relevant to this Complaint, Asset Acceptance has 

transacted business in this District. 

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6. Asset Acceptance is a "debt collector" as defined in Section 803(6) ofthe FDCPA 

15 U.S.C. § 1692a(6). As part of its debt collection activities, Asset Acceptance furnishes 

information to consumer reporting agencies. As such, Asset Acceptance is a person or entity 

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

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

7. The term "consumer" as used in this Complaint means any natural person obligated 

or allegedly obligated to pay any debt, as "debt" is defined in Section 803(5) of the FDCPA, 

15 U.S.C. § 1692a(5). 

COMMERCE 

8. At all times material to this Complaint, Asset Acceptance has maintained a 

substantial course of trade in or affecting commerce, as "commerce" is defined in Section 4 of 

the FTC Act, 15 U.S.C. § 44. 

DEFENDANT'S BUSINESS PRACTICES 

Background on Defendant's Collection Practices 

9. Colloquially known as a "debt buyer," Asset Acceptance purchases and collects on 

portfolios of charged-off consumer debts from credit originators such as credit card issuers, 

consumer finance companies, health clubs, and telecommunications and utilities providers. As 

of September 30, 2010, Asset Acceptance held more than 34 million individual accounts with an 

original value of more than $42 billion, purchased for an aggregate of2.54% of face value. 

10. Asset Acceptance specializes in purchasing and collecting on portfolios of older 

accounts that have previously been placed with one or more third party collectors and are more 

3 
than 360 days past due. Its strategy for successful collection of such debts includes pursuing 

consumers for ten years or longer. 

11. Asset typically receives the portfolio account data from sellers in electronic 

databases. Although the data provided varies by portfolio, it typically includes the consumer 

account holder's name, last known address and telephone number, the account number and 

balance (including any interest and fees), the last payment date and/or the charge.off date, and, if 

known, the account holder's Social Security number. Some portfolios may include a significant 

number of accounts with no Social Security numbers, while other portfolios may include a 

significant number of accounts with inaccurate addresses. The portfolio account data does not 

include account documents such as contracts signed by the consumer or monthly billing 

statements. 

12. Asset Acceptance's contracts with portfolio sellers include representations and 

warranties regarding the validity and integrity of the account information it purchases. Such 

representations and warranties vary with the portfolio seller and the portfolio purchased. In some 

instances, however, the contracts specifically disclaim the warranties about the accuracy of the 

account data. For example, a contract to purchase debts from a major national retailer contains 

the following disclaimer: "Seller has not represented, warranted, or covenanted the number, 

nature, accuracy, completeness, enforceability or validity of any accounts or accounts [ sic] 

information." In other instances, contracts may warrant the accuracy of only certain information 

or specifY that some of the data may be inaccurate (e.g., contracts for certain telecommunications 

portfolios stating that the addresses in the account data may not be correct). 

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13. Individual account documents such as credit applications and account statements 

that may substantiate the portfolio's data do not exist for some portfolios or for some accounts 

within a portfolio. Documents are less likely to be available for accounts in portfolios of older 

debt, portfolios from credit originators that have gone out of business, or portfolios purchased 

from other debt buyers (as distinguished from credit originators). Asset advises its collectors that 

documents are likely unavailable for accounts with charged-off dates older than seven years. 

14. Although Asset does not usually choose to acquire account documents with a 

portfolio purchase, Asset's contracts with credit originators allow Asset to order a small number 

or percentage of available documents for free for a short period of time. After that, Asset must 

pay the portfolio's seller for additional account documents, if they are available. That document 

fee can range from $5 to as much as $55 per item. It can take as long as three to six months for 

Asset to receive documents ordered from a credit originator. 

15. After purchasing a portfolio, Asset loads the new portfolio's data into its collection 

system, updates consumers' address information by cross-referencing account data with a 

national change-of-address database, sends initial collection notices to consumers, and reports 

eligible accounts to the national consumer reporting agencies. Thirty days after sending the 

initial notice to consumers, Asset assigns accounts to account representatives who attempt to 

collect the debts by contacting consumers directly by telephone. Through available commercial 

databases, including credit reporting databases, Asset routinely obtains new address and contact 

information about consumers it cannot locate (this process is known as "skip-tracing"). 

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16. Asset's electronic collection system provides account representatives with 

information about the debt, including the charge-off date, whether account documents are 

available, and, if so, whether they are in-house or must be ordered from the creditor. The system 

also indicates whether Asset has determined that the debt is past the statute of limitations. Asset 

trains its account representatives to document in its electronic system each contact, or attempted 

contact, with a consumer. 

Defendant's Notice to Consumers of Reportin~ Ne~ative Information 

to Consumer Reportin~ A~encies 

17. The initial collection notice Asset sends to consumers typically discloses that Asset 

may report information about the consumer to consumer reporting agencies. Section 623(a)(7) of 

the FCRA requires that this disclosure be provided to consumers no later than thirty days after 

Asset reports negative information about the consumer to a consumer reporting agency. 

18. Some initial collection notices with the required FCRA disclosure are returned to 

Asset as undeliverable. In numerous instances, these notices are not re-mailedtoconsumers.As 

a result, in numerous instances consumers whose initial collection notices are returned to Asset 

do not receive the disclosure required by Section 623(a)(7) ofthe FCRA. 

19. Many consumers who do not receive the initial disclosure from Asset are unaware 

that Asset is furnishing negative information about them to consumer reporting agencies. Notice 

of the debt and that Asset is reporting it is particularly important when debt buyers like Asset are 

involved. Because Asset purchased the consumers' debt after it was in default, consumers have 

no idea who Asset is or that they allegedly owe Asset any money. Additionally, where Asset 

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purchases older debt, consumers are less likely to know about or remember a defaulted 

obligation, especially if the debt has not previously been reported to a consumer reporting 

agency. Moreover, where Asset has identified the wrong person as the account holder, either 

because of errors in the original data or because of inaccuracies introduced through skip-tracing, 

consumers who do not receive the initial disclosure have no idea that negative information is 

being reported about them. 

20. Some consumers who do not receive an initial notice from Asset first learn that the 

alleged debt appears on their credit report when they apply for new credit, such as a mortgage or 

auto loan. In order to obtain credit, some consumers who question the validity of the debt may 

pay it, even if they believe they do not owe it, because disputing the debt can be a lengthy process 

without guaranteed results. Other consumers may pay higher interest rates or fees for credit, or 

may be denied credit. 

Defendant's Handlin&! of Written Disputes Sent Within 30 Days ofthe Initial Notice 

21. The initial collection notice sent to consumers by Asset includes the name of the 

original creditor, the original account number, and the balance past due. Asset uses the 

information loaded into its collection system to generate the initial collection notice. 

22. Some consumers who receive an initial collection notice from Asset send Asset, 

within thirty days of receipt of Asset's initial communication, a written notice disputing the debt. 

Section 809(b) of the PDCP A requires that debt collectors who receive such a written dispute 

cease collecting the debt "until the debt collector obtains verification of the debt" and mails the 

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verification to the consumer. Asset temporarily stops collection action on the debt after it 

recei ves such a dispute. 

23. Asset sends consumers who dispute the debt as described in Section 809(b) of the 

FDCP A a form letter stating, "Enclosed please find an account statement prepared with 

information provided to us by the prior creditor." Attached to the form letter is a form document 

titled "debt validation." Asset generates the information in the form from the portfolio data it 

purchased and loaded into its collection system the same information that was the basis for the 

initial collection notice. The debt validation form includes the name of the original creditor, the 

original account number, and the balance past due, as well as the consumer's name, address and 

the last four digits of his or her Social Security number. Asset resumes collection activity on the 

debt once the form letter is mailed to the consumer. 

24. Asset sends the debt validation form to consumers who dispute the validity of the 

debt regardless ofthe nature or specifics ofthe consumer's dispute. In most cases, Asset does 

not obtain additional information about the debt from the original creditor or any other source or 

take other steps to reasonably investigate the consumer's dispute. Providing the consumer with 

the same information from the same database is not obtaining "verification of the debt" for 

purposes of Section 809 of the FDCP A. 

Defendant's Repeated Calls to Third Parties 

25. In the course of attempting to collect a debt~ in numerous instances Asset collectors 

telephone individuals who are not the consumers who allegedly owe the debts that Asset is 

attempting to collect. Asset identifies these wrong parties' phone numbers either because the 

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original account data Asset purchase is outdated and inaccurate, or because the skip-tracing 

databases it uses to update consumer information are inaccurate. 

26. In numerous instances, individuals who repeatedly received such erroneous phone 

calls have complained to Asset about these calls and have informed Asset that the phone number 

does not belong to the debtor that Asset is seeking. 

27. Even after the individual wrongly called has told Asset that it has called the wrong 

party, in numerous instances, Asset calls the individual repeatedly. In these calls, Asset has 

represented that the person called owes the debt or has information concerning the person who 

actually owes the debt, even though that is not the case. Asset's electronic collection system has 

allowed such wrong party calls even after the collector has marked the phone number as 

incorrect. 

28. Having received notice that it has contacted the wrong party, Asset has no 

reasonable basis to call that telephone number again unless and until it possesses additional 

information showing that the telephone number belongs to the consumer who allegedly owes the 

debt or to a person it has reason to believe possesses location information about that consumer. 

29. In other instances, Asset collectors have called the same third party multiple times 

to request location information about a consumer. In some cases, these calls have been made to 

individuals whom Asset believed were the consumer's family members or friends. In other 

cases, the calls were to wrong parties who did not know the consumer at all. Asset makes such 

calls even though the third party has not requested additional calls, and it is not reasonable for 

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Asset to believe that the third party's earlier response was erroneous or incomplete or that the 

third party has correct or complete location information that he or she previously did not have. 

Defendant's Practices When Collecting Debts Beyond the Statute of Limitations 

30. Because Asset Acceptance regularly collects older debt, and because its business 

strategy includes holding the debt it purchases for several years, a large percentage of the 

individual accounts it collects are past the statute of limitations. 

31. The statute of limitations for any given debt can vary from as short as two to three 

years to as long as fifteen or more years, and depends on several factors, including the date that 

the debt was last paid or went into default, the law governing the limitations period for the type 

of debt (e.g., telecommunications, credit card, health club, etc.), whether the debt is based on an 

oral or written contract, and whether the debt is the result of a judgment. A debt that is past the 

statute of limitations can be revived in many states if the consumer either makes a payment on 

the debt or states, in writing, an intention to pay it. 

32. A past-statute debt remains a valid obligation owed by the consumer in every state 

except Mississippi and Wisconsin. Consumers, however, have a dispositive affirmative defense 

to any legal action initiated to collect a past statute debt. 

33. Asset tracks the date that it believes any given account will go past the statute of 

limitations. Collectors are trained how to collect past-statute debts, and are taught that the debt 

will be revived if the consumer makes a partial payment on such a debt. When a consumer 

cannot pay a debt in full, but can pay something, Asset will enter into a payment plan with that 

consumer. 

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34. Many consumers do not know if the accounts that Asset is attempting to collect are 

beyond the statute of limitations. Consumers also do not realize that making a partial payment 

on a debt, or making a written promise to pay will, in many instances, revive the debt. When 

Asset contacts consumers to collect on a debt, many consumers believe they could experience 

serious negative consequences, including being sued, if they fail to pay the debt. Similarly, many 

consumers believe that making a partial payment on a debt in response to Asset's collection 

efforts is a positive action that can avert the negative consequences of nonpayment. If consumers 

knew, in connection with a past-statute debt, that Asset had no legal means to enforce collection 

of the debt, or understood that making a partial payment or a written to promise to pay would 

revive it, some consumers would likely choose not to make a payment or a written promise to 

pay. 

Defendant's Handling of Consumer Disputes 

35. Asset Acceptance routinely receives written and telephonic complaints from 

consumers who state they do not owe the debt that Asset Acceptance is attempting to collect. 

Complaints include claims that the debt that Asset seeks to collect does not belong to the 

individual that Asset has contacted, that the debt is the result of fraud or identity theft, or that the 

debt has already been paid. 

36. Notwithstanding the nature ofthe consumer's dispute, Asset typically requires 

disputing consumers to provide evidence substantiating claims that they do not owe the debt. For 

example, in numerous instances Asset requires consumers who claim that a debt is not theirs to 

send in a police report or a notarized affidavit swearing that the debt was the result of fraud. 

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These consumers, who in many instances have simply been wrongly identified as debtors by 

Asset, may have no reason to believe that they are victims of fraud or identity theft, and are likely 

unwilling or unable to secure a police report or sign a sworn statement claiming otherwise. 

37. Even consumers who do claim that the debt is the result of fraud or identity theft 

may be unable to provide a police report or a notarized statement, especially if the debt is very 

old or the fraud occurred elsewhere. Police may be unwilling to take a report regarding 

fraudulent reporting of debts that are many years old or originated out of state, and many 

consumers cannot freely or easily obtain a notary's services. Similarly, consumers who assert 

that they previously paid a debt may not be able to provide Asset with a cancelled check or a 

"payment in full" letter, especially if the alleged debt is many years old and records have been 

lost or destroyed. If consumers do not provide the requested documentation, Asset considers the 

dispute resolved and resumes its collection efforts. 

38. Asset does not take independent steps to verify the accuracy of disputed account 

information. Even when the original creditor has documents available, Asset does not routinely 

purchase them. And even when such documents have been purchased and are available for 

collectors to review, in numerous instances collectors do not review the documents during the 

course of a typical collection calL Collectors are expected or strongly encouraged to make at 

least 200 collections calls every day, leaving them with limited time and incentive to respond to 

specific consumer disputes and review scanned images of account documents. 

39. Additionally, in numerous instances, collectors do not routinely review the original 

account data to see if account information such as the consumer's Social Security number, 

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address or telephone number was obtained from the original creditor or merely updated via 

commercial databases. The information obtained from these databases is not always accurate or 

current. Individuals with names the same as or similar to debtors in Asset's database may be 

wrongly identified or individuals whose phone numbers or addresses were previously associated 

wi1h one of Asset's debtors may be wrongly targeted. These individuals are erroneously 

subjected to collection efforts. 

40. When Asset continues to collect on debts disputed by consumers without 

adequately investigating the consumers' disputes, it lacks a reasonable basis for such continued 

collection. In many instances consumers are harmed by Asset's ongoing collection efforts on 

debts that they do not owe. These consumers suffer impaired credit, ongoing collection calls, and 

even lawsuits. 

Defendant's Handling of Dispntes Received from Consumer Reporting Agencies 

41. Asset Acceptance regularly and in the ordinary course of business furnishes 

information about its transactions or experiences with its consumers to one or more consumer 

reporting agencies. 

42. In numerous instances, consumers have notified consumer reporting agencies that 

Asset-related account information appearing on their credit reports is wrong. The consumer 

reporting agencies forward Asset Acceptance most such disputes in an electronic format, through 

automated consumer dispute verification ("ACDV") forms. Asset received more than 500,000 

ACDVs each year in 2008 and 2009. 

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43. Pursuant to Section 623(b)(I) of the FCRA, Asset Acceptance, as a furnisher of 

information to consumer reporting agencies, is required to conduct a reasonable investigation of 

the disputed account information upon receipt of an ACDV from a consumer reporting agency. 

44. Asset processes many ACDVs through "batch processing," an automated system in 

which certain "identifiers" in Asset's electronic account records are automatically compared with 

the information provided on the ACDV forms. When the Social Security number and consumer 

name on the ACDV match the information in Asset's database, Asset reports to the consumer 

reporting agency that it has verified the disputed information. In addition, many ACDV s that are 

batch processed have more information about the consumers' written disputes to the consumer 

reporting agencies in a generalized "comments" field. Asset does not review these comments for 

ACDVs that it batch processes. 

45. The batching process of comparing a consumer's name and Social Security number 

often does not adequately respond to the consumer's dispute and is not a reasonable 

investigation. Because Asset originally reported the consumer's name and Social Security 

number to the consumer reporting agencies, in numerous instances these identifiers match. Asset 

does not investigate the particular merits of the consumer's claim by, for example, reviewing 

individual account documents, contacting the original portfolio seller to verify the accuracy of 

the information, asking the consumer reporting agency for more information, or reviewing its 

own internal notes. 

46. Asset ACDV "specialists" individually review some ACDV disputes, including 

some classified by the consumer reporting agencies as involving claims of fraud, identity theft, or 

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"paid prior." Such individual review is limited, since Asset employs only 14 to 20 ACDV 

specialists and expects them to process at least 18-20 ACDVs per hour. 

47. To investigate some ACDV disputes classified by consumer reporting agencies as 

involving fraud or identity theft allegations, Asset sends a letter to the consumer requesting proof 

of fraud or identity theft. Similarly, Asset may seek to investigate some consumer disputes by 

reviewing account documents. If such documentation is not available internally, Asset may try to 

order documents from the original creditor. When available, it can take up to six months for 

Asset to obtain the requested documents. Likewise, in numerous instances, it can take several 

weeks for Asset to receive and review documents it requested from consumers. In these 

circumstances, Asset is unable to complete its investigation in the time allowed for investigations 

by Sections 623(b)(2) and 611(a)(1) of the FCRA. For these ACDVs, Asset marks the negative 

information as disputed but continues to report it. Because Asset has not completed its 

investigation and therefore cannot at that time reasonably verify the information it reported to the 

CRA, Section 623(b)(I)(E) of the FCRA requires that Asset modify, delete, or permanently block 

the information. 

48. Consumers are harmed by Asset's inadequate investigation of ACDV disputes. 

Many consumers have been denied credit or charged higher rates or fees for credit because Asset 

continues to report inaccurate negative information to their credit files. 

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Portfolios with Suspect Account Data 

49. Asset relies on the credit originator's contractual representations and warranties 

about the accuracy and validity of the account data it purchases when it initiates collection on 

new portfolios. In some instances, however, Asset learns that an acquired portfolio contains a 

significant amount of unreliable account data. For example, Asset may learn that some portfolios 

have inaccurate Social Security numbers or other faulty data that leads to the mistaken 

identification of debtors. In other instances, a pattern of similar consumer disputes regarding 

accounts within a particular portfolio alerts Asset to potential problems with the business 

practices of the original creditor and the validity of the credit agreement establishing the debt. In 

addition, some portfolios may be missing Social Security numbers, addresses, or other 

identification information, causing Asset to augment the data it received from the portfolio seller 

with information from commercially available databases. In these instances, it is not reasonable 

for Asset to continue to rely solely on the creditor's contractual representations and warranties 

about the accuracy of the account data. 

50. In particular, Asset has reason to doubt the reliability of some account data 

purchased from Bally Total Fitness. Many Bally accounts lack Social Security numbers or 

include incorrect Social Security numbers. Many consumers have disputed Bally's debts that 

Asset attempts to collect, claiming that Asset is dunning the wrong person, or that they did not 

agree to contract with Bally for a monthly service, but rather signed up for a free trial 

membership or cancelled the contract. This pattern of incomplete or erroneous data coupled with 

16 
numerous disputes calls into question the validity of the account information on which Asset 

relies to collect these debts. 

51. Asset's policies and practices regarding Bally portfolios show that Asset is aware 

that collecting these accounts without additional substantiation may be problematic. Asset 

collectors receive special training on handling certain Bally disputes. Moreover, Bally accounts 

are handled differently from other debts. For example, when Asset collectors call consumers 

about Bally accounts, the collectors have greater discretion to accept lower payments as 

satisfaction of the debt than would be sufficient to satisfy other types of debts. 

52. Where, as in the case of collections for Bally accounts, Asset has reason to know 

that the initial account data purchased from a creditor is unreliable in numerous instances, Asset 

lacks a reasonable basis to rely solely on the original creditor's contractual warranties of accuracy 

when it represents to consumers that they owe debts for such accounts. 

SECTION 5 OF THE FTC ACT 

53. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits "unfair or deceptive acts 

or practices in or affecting commerce." Misrepresentations or deceptive omissions of material 

fact constitute deceptive acts or practices prohibited by Section 5(a) of the FTC Act. 

VIOLATIONS OF SECTION 5 OF THE FTC ACT 

COUNT I 

Lack of Reasonable Basis 

54. In numerous instances, through the means described in Paragraphs 9-52, in 

connection with collecting or attempting to collect debts from consumers, Asset Acceptance has 

17 
represented to consumers, directly or indirectly, expressly or by implication, that the debts are 

valid and that consumers have an obligation to pay the debts, including but not limited to 

circumstances where: 

a. The consumer has disputed the validity or accuracy of the alleged 

debt and Asset failed to review information substantiating the 

accuracy of the debt or the identity of the debtor prior to continuing 

collection on that account; or 

b. Asset has reason to believe that a specific portfolio of accounts 

contained unreliable data and failed to obtain and review 

information substantiating the accuracy of individual account data 

prior to collecting or attempting to collect on individual accounts in 

that portfolio. 

55. In truth and in fact, the material representations set forth in Paragraph 54 are false 

or misleading, or Asset Acceptance did not have a reasonable basis for the representations at the 

time the representations were made. Therefore, the representations set forth in Paragraph 54 are 

false or misleading and constitute deceptive acts or practices in violation of Section 5(a) of the 

FTC Act, 15 U.S.C. § 45(a). 

COUNT II 

Failure to Disclose 

56. In numerous instances, through the means described in Paragraphs 9-52, in 

connection with collecting or attempting to collect debts from consumers, Asset Acceptance has 

18 
demanded that consumers pay, in full or in part, debts that are beyond the statute of limitations. 

By demanding that consumers pay these debts, Asset has represented, expressly or by 

implication, that consumers owe these debts in the amounts demanded. 

57. Asset Acceptance has failed to disclose, or failed to disclose adequately, that, in 

many instances, (a) it cannot require through a lawsuit that consumers pay debts beyond the 

statute of limitations, and (b) if consumers make partial payments on these debts, the statute of 

limitations period will be renewed and Asset could again require through a lawsuit that 

consumers pay the total outstanding amount of these debts. These facts would be material to 

consumers in deciding whether to pay these debts in full or in part. 

58. Asset's failure to disclose the material information described in Paragraph 57, in 

light of the representations and practices in Paragraph 56, constitutes a deceptive act or practice 

in violation of Section 5(a) of the FTC Act, 15 U.S.c. § 45(a). 

THE FAIR CREDIT REPORTING ACT 

59. The FCRA was enacted in 1970 and became effective on Apri125, 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 of the Act, which became effective on October 1, 1997. 

60. 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. 

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61. For purposes of Section 623(a)(7) of the FCRA, 15 U.S.C. § 1681s-2(a)(7), 

"negative information" means "information concerning a customer's delinquencies, late 

payments, insolvency, or any form of default," 15 U.S.C. § 1681s-2(a)(7)(G)(i), and the terms 

"financial institution" and "customer" have the same meanings as in Section 509 Public Law 

106-102, 15 U.S.C. § 6809(3). 15 U.S.C. § 1681s-2(a)(7)(G)(ii). 

VIOLATIONS OF THE FAIR CREDIT REPORTING ACT 

COUNT III 

Violations of Section 623(a)C1)(A) 

62. Section 623(a)(1)(A) of the FCRA prohibits furnishers of information to consumer 

reporting agencies from furnishing any information relating to a consumer to any consumer 

reporting agency if the furnisher knows or has reasonable cause to believe that the information is 

inaccurate. 15 U.S.C. § 1681s-2(a)(I)(A). 

63. In numerous instances, through the means described in Paragraphs 9-52, in 

connection with furnishing information relating to a consumer to a consumer reporting agency, 

Asset Acceptance has furnished such information while knowing or having reasonable cause to 

believe that the information was inaccurate. 

64. The acts and practices alleged in Paragraph 63 constitute violations of 

Section 623(a)(l)(A) of the FCRA, 15 U.S.C. §168Is-2(a)(l)(A). Pursuant to Section 621(a)(1) 

of the FCRA, 15 U.S.C. § 1681s(a)(l), the acts and practices alleged in Paragraph 63 also 

constitute unfair or deceptive acts or practices in violation of Section 5(a) of the FTC Act, 

15 U.S.C. § 45(a). 

20 
COUNT IV 

Violations of Section 623(a)(7) 

65. Section 623(a)(7) of the FCRA requires that, if any financial institution that 

extends credit to customers and regularly and in the ordinary course of business furnishes 

information to a consumer reporting agency furnishes negative information about a customer to a 

consumer reporting agency, the financial institution shall provide the customer with a clear and 

conspicuous written notice about the furnishing of such negative information no later than thirty 

days after the financial institution furnishes the negative information to the consumer reporting 

agency. 15 U.S.C. § 1681s-2(a)(7). 

66. Asset Acceptance is a "financial institution" with "customers" as defined by 

Section 623(a)(7)(G)(ii) of the FCRA, 15 U.S.C. § 1681s-2(a)(7)(G)(ii). 

67. Asset Acceptance furnishes "negative information" about its customers regarding 

credit extended to customers to consumer reporting agencies as "negative information" is defined 

in Section 623(a)(7)(G)(i) of the FCRA, 15 U.S.C. § 1681s-2(a)(7)(G)(i). 

68. In numerous instances, through the means described in Paragraphs 9-52, in 

connection with the furnishing of negative information about its customers to consumer reporting 

agencies, Asset Acceptance has failed to provide its customers with the written notice required 

by Section 623(a)(7) no later than thirty days after furnishing the negative information to the 

consumer reporting agency. 

69. The acts and practices alleged in Paragraphs 67-68 constitute violations of 

Section 623(a)(7) of the FCRA, 15 U.S.C. §1681s-2(a)(7). Pursuant to Section 621(a)(I) of the 

21 
FCRA, 15 U.S.C. § 1681s(a)(l), the acts and practices alleged in Paragraphs 67-68 also 

constitute unfair or deceptive acts or practices in violation of Section 5(a) of the FTC Act, 

15 U.S.C. § 45(a). 

COUNT V 

Violations of Section 623(b)( 1) 

70. Section 623(b) of the FCRA requires furnishers of information to consumer 

reporting agencies to conduct a reasonable investigation when the furnisher receives a notice of 

dispute regarding the completeness or accuracy of the reported information from a consumer 

reporting agency in accordance with the provisions of Section 611(a)(2) of the FCRA, 15 U.S.C. 

§ 1681 i, and to report the results of the investigation to the consumer reporting agency. 15 

U.S.C. § 1681s-2(b). 

71. In numerous instances, through the means described in Paragraphs 9-52, Asset 

Acceptance does not conduct a reasonable investigation, or any investigation, when it receives a 

notice of dispute from a consumer reporting agency. 

72. The acts and practices alleged in Paragraph 71 constitute violations of 

Section 623(b) ofthe FCRA, 16 U.S.C. § 1681s-2(b). Pursuant to Section 621 (a)(l) of the 

FCRA, 15 U.S.C. § 1681s(a)(l), the acts and practices alleged in Paragraph 71 also constitute 

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

22 
FAIR DEBT COLLECTION PRACTICES ACT 

73. In 1977, Congress passed the FDCPA, 15 U.S.C. §§ 1692-1692p, which became 

effective on March 20, 1978, and has been in force since that date. Section 814 of the FDCP A, 

15 U.S.C. § 1692/, authorizes the Commission to use all of its functions and powers under the 

FTC Act to enforce compliance with the FDCPA by any debt collector, irrespective of whether 

that debt collector is engaged in commerce or meets any other jurisdictional tests set by the 

FTC Act. The authority of the Commission in this regard includes the power to enforce the 

provisions of the FDCP A in the same manner as if the violations of the FDCP A were violations 

of a Federal Trade Commission trade regulation rule. 

74. Section 803(7) of the FDCPA defines the term "location information" as meaning a 

consumer's place of abode and the consumer's telephone number at such place, or the 

consumer's place of employment. 15 U.S.C. § 1692a(7). 

VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT 

COUNT VI 

Violations of Section 804 

75. Section 804 of the FDCPA, 15 U.S.C. § 1692b, governs the manner in which debt 

collectors may communicate with any person other than the consumer for purposes of acquiring 

location information about the consumer. Section 804(3) prohibits debt collectors from 

communicating with any person about a consumer more than once unless requested by the person 

or unless the debt collector reasonably believes that the earlier response of such person is 

erroneous or incomplete and that such person now has correct or complete information. 

23 
76. In numerous instances, through the means described in Paragraphs 9-52, in 

connection with the collection of debts, Asset Acceptance, directly or indirectly, has 

communicated more than once with persons other than the consumer for the purpose of obtaining 

location information about the consumer without a reasonable belief that the earlier response of 

the person was erroneous or incomplete and the person then had correct or complete location 

information. 

77. The acts and practices alleged in Paragraph 76 constitute violations of Section 

804(3) of the FDCPA, 15 U.S.C. § 1 692b(3). Pursuant to Section 814(a) of the FDCPA, 

15 U.S.c. § 16921(a), the acts and practices alleged in Paragraph 76 also constitute unfair or 

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

COUNT VII 

Violations of Section 805 

78. Section 805 ofthe FDCPA, 15 U.S.C. § 1692c, governs communications in 

connection with debt collection generally. Section 805(b) specifically prohibits communications 

about a debt with any person other than the consumer, a consumer reporting agency, the creditor, 

or their attorneys except as allowed by Section 804 or with the permission of the consumer, or a 

court of competent jurisdiction, or as reasonably necessary to effectuate post judgment relief. 

79. In numerous instances, through the means described in Paragraphs 9-52, in 

connection with the collection of debts, Asset Acceptance, directly or indirectly, has 

communicated about a debt with persons other than the consumer, a consumer reporting agency, 

24 
the creditor, or their attorneys without the permission of the consumer, or as otherwise allowed 

by Section 804. 

80. The acts and practices alleged in Paragraph 79 constitute violations of Section 

805(b) of the FDCPA, 15 U.S.C. § 1692c(b). Pursuant to Section 814(a) of the FDCPA, 

15 U.S.C. § 16921(a), the acts and practices alleged in Paragraph 79 also constitute unfair or 

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

COUNT VIII 

Violations of Section 807 

81. Section 807 of the FDCPA, 15 U.S.C. § 1692e, prohibits debt collectors from using 

any false, deceptive, or misleading representation or means in connection with the collection of 

any debt. Section 807(2)(A), 15 U.S.C. § 1692e(2)(A), specifically prohibits the false 

representation of the character, amount, or legal status of any debt, while Section 807(8), 

15 U.S.c. § 1692e(8), prohibits communicating or threatening to communicate to any person 

credit information which is known or which should be known to be false, including the failure to 

communicate that a disputed debt is disputed, and Section 807(10), 16 U.S.c. 1692(e)(10), 

prohibits using false representations or deceptive means to collect or attempt to collect any debt 

or to obtain information concerning a consumer. 

82. In numerous instances, through the means described in Paragraphs 9-52, in 

connection with the collection of debts, Asset Acceptance, directly or indirectly, has used false, 

deceptive, or misleading representations or means, in violation of Section 807 of the FDCP A, 

15 U.S.C. § 1692e, including, but not limited to, the following: 

25 
a. In numerous instances, Asset Acceptance, directly or indirectly, has 

used false representations concerning the character, amount, or legal 

status ofa debt, in violation of Section 807(2)(A) of the FDCPA, 

15 U.S.C. § 1692e(2)(A); 

b. In numerous instances, Asset Acceptance, directly or indirectly, has 

communicated credit information to consumer reporting agencies 

that it knew, or should have known, to be false, in violation of 

Section 807(8) of the FDCPA, 15 U.S.C. § 1692e(8); and 

c. In numerous instances, Asset Acceptance, directly or indirectly, has 

used false representations or deceptive means to collect or attempt to 

collect any debt or to obtain information concerning a consumer in 

violation of Section 807(10) of the FDCPA, 15 U.S.C. § 1692e(10). 

83. The acts and practices alleged in Paragraph 82 constitute violations of Section 807 

ofthe FDCPA, 15 U.S.C. § 1692e. Pursuant to Section 814(a) of the FDCPA, 

15 U.S.C. § 16921(a), the acts and practices alleged in Paragraph 82 also constitute unfair or 

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

COUNT IX 

Violations of Section 809 

84. Section 809(b) ofthe FDCPA, 15 U.S.C. § 1692g(b), provides, inter alia, that if a 

consumer notifies a debt collector in writing, within thirty days ofthe consumer's receipt of the 

initial communication from the debt collector, that the debt is disputed, the debt collector shall 

26 
cease collection of the debt until the debt collector obtains and provides verification of the debt 

to the consumer. 

85. In numerous instances, through the means described in Paragraphs 9-52, in 

connection with the collection of debts, when a consumer has notified Asset Acceptance, in 

writing within the thirty-day period described in Section 809(a) of the FDCPA, 15 U.S.C. 

§ 1692g(a), that the debt, or a portion thereof, is disputed, Asset has failed to obtain and provide 

verification of the debt to the consumer and has continued to attempt to collect the debt. 

86. The acts and practices alleged in Paragraph 85 constitute violations of Section 

809(b) of the FDCPA, 15 U.S.C. §1692g(b). Pursuant to Section 814(a) of the FDCPA, 

15 U.S.C. § 16921(a), the acts and practices alleged in Paragraph 85 also constitute unfair or 

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

INJUNCTION FOR VIOLATIONS OF THE FTC ACT, FCRA, AND FDCPA 

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

issue a permanent injunction to ensure that Asset Acceptance will not continue to violate the 

FTC Act, the FCRA, and the FDCP A. 

EQUITABLE RELIEF FOR VIOLATIONS OF THE FTC ACT, FCRA, AND FDCPA 

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

issue all equitable and ancillary relief as it may deem appropriate in the enforcement of the FTC 

Act, the FCRA, and the FDCPA, including the ability to order rescission or reformation of 

contracts, restitution, the refund of monies paid, and disgorgement to deprive a wrongdoer of 

ill-gotten gain. 

27 
CIVIL PENALTIES FOR VIOLATIONS OF THE FCRA 

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

Court to award monetary civil penalties in the event of a knowing violation, which constitutes a 

pattern or practice of violations. Asset Acceptance's violations of Sections 623(a)(7) and 623(b) 

of the FCRA, as alleged in this Complaint, were knowing and constituted a pattern or practice of 

violations. As specified by the Federal Civil Penalty Inflation Adjustment Act of 1990,28 

U.S.C. § 2861, as amended, the Court is authorized to award a penalty of not more than $2,500 

per violation for violations occurring before February 10, 2009, and $3,500 per violation for 

violations occurring on or after that date. 

90. Each instance in which Asset Acceptance has failed to comply with the FCRA in 

one or more of the ways described above constitutes a separate violation of the FCRA for the 

purpose of assessing monetary civil penalties under section 621 of the FCRA. Plaintiff seeks 

monetary civil penalties for every separate violation of the FCRA. 

CIVIL PENALTIES FOR VIOLATIONS OF THE FDCPA 

91. Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. § 45(m)(l)(A), and Section 814(a) 

of the FDCPA, 15 U.S.C. § 16921, authorize the Court to award monetary civil penalties for 

violations of the FDCP A when such violations were committed with actual knowledge or 

knowledge fairly implied on the basis of objective circumstances as set forth in 

Section 5(m)(l)(A) of the FTC Act, 15 U.S.C. § 45(m)(l)(A). Asset Acceptance's violations of 

the FDCP A, as alleged in this Complaint, were made with actual knowledge or knowledge fairly 

implied on the basis of objective circumstances. As specified by the Federal Civil Penalty 

28 
Inflation Adjustment Act of 1990,28 U.S.C. § 2861, as amended, the Court is authorized to 

award a penalty of not more than $11,000 for each violation of the FDCPA before February 10, 

2009, and not more than $16,000 for each violation of the FDCPA after that date. 

92. Each instance in which Asset Acceptance has failed to comply with the FDCPA in 

one or more of the ways described above, constitutes a separate violation of the FDCP A for the 

purpose of assessing monetary civil penalties. Plaintiff seeks monetary civil penalties for every 

separate violation of the FDCP A. 

PRAYER FOR RELIEF 

WHEREFORE, Plaintiff, pursuant to 15 U.S.c. §§ 45(m)(1)(A), 53(b), 1692/, 1681s, and 

the Court's own equitable powers, respectfully requests that the Court: 

1. Enter a permanent injunction to prevent future violations of the FTC Act, the 

FCRA, and the FDCP A by Asset Acceptance; 

2. Award such relief as the Court finds necessary to redress injury to consumers 

resulting from Defendant's violations of the FTC Act, the FCRA, and the FDCPA, including but 

not limited to, rescission or reformation of contracts, restitution, the refund of monies paid, and 

the disgorgement of ill-gotten gains; 

3. Award Plaintiff monetary civil penalties for each violation of the FCRA and 

FDCP A as alleged in this Complaint; and 

4. Award Plaintiff the costs of bringing this action, as well as such other and 

additional relief as the Court may determine to be just and proper. 

29 
Dated: da--n, ,50 ,2012 

Of Counsel: 

ROBERTJ.SCHROEDER 

Director, Northwest Region 

TRACY S. THORLEIFSON 

JULIE MAYER 

Attorneys 

Federal Trade Commission 

Northwest Region 

915 Second Ave., Suite 2896 

Seattle, WA 98174 

Tel: 206-220-6350 

Fax: 206-220-6366 

tthorleifson@ftc.gov 

jmayer@ftc.gov 

Respectfully submitted, 

ROBERT E. O'NEILL 

U.S. Attorney for the Middle District of Florida 

TONY WEST 

Assistant Attorney General, Civil Division 

MAAME EWUSI-MENSAH FRIMPONG 

Acting Deputy Assistant Attorney General 

MICHAEL S. BLUME 

Director, Consumer Protection Branch 

KENNETH L. JOST 

Deputy Director, Consumer Protection Branch 

.-t, -1. '--

LACY R. HARWELL, JR. 

Assistant United States Attorney 

Chief, Civil Division 

Florida Bar Number 714623 

Office of the United States Attorney for the 

Middle District of Florida 

400 North Tampa Street, Suite 3200 

Tampa, Florida 33602 

Tel. (813) 274-6000 

Fax (813) 274-6200 

Randy .Harwell@usdoj.gov 

/' .J.----- /t::..--

/~SANG H. LEE 

ADRIENNE E. FOWLER 

Trial Attorneys, Consumer Protection Branch 

U.S. Department of Justice 

P.O. Box 386 

Washington, DC 20044 

Tel: 202-616-0219 

Fax: 202-514-8742 

Adrienne.E.F owler@usdoj .gov 

Sang.H.Lee@usdoj.gov 

30