Two State Attorneys General Take Action on Debt Collection Agencies

At the end of the first full work week of 2010, the top prosecutors in Louisiana and Washington announced actions against accounts receivable management firms and their owners.

James “Buddy” Caldwell, Louisiana’s attorney general, said Friday that his office had obtained injunctions against two collection agencies and their operators. On the same day, Washington’s Attorney General, Rob McKenna, announced that his office had settled charges with a collection agency that promised to clean up its act.

According to a press release, Caldwell’s office in late December had successfully won an injunction against Baton Rouge, La.-based collection agency Bush & Kennedy, Inc. The order restricted the business from further operations and specified that two of the firm’s principals — William S. Ferguson and Quay W. Parrott Jr. – were barred from conducting business together.

Late last week, a judge hit Ferguson and Parrot with additional injunctions at the request of Caldwell’s office. Ferguson cannot use unfair and deceptive acts and practices at his current place of business, the collection agency Franklin, Grant & Associates, Inc. in Metairie, La. Parrott is completely enjoined from conducting any new business at his new place, Halsey & Associates, LLC, also in Metairie.

In Washington, McKenna’s office said that Everett, Wash.-based Topco Financial Services, Inc. agreed not to harass, threaten or cuss at consumers as part of a settlement.

The collection agency had been sued by McKenna in February 2009. As a part of the settlement, the company must pay some $38,000 in penalties and legal fees. An additional $82,000 in penalties and fees was suspended, provided the company complies with the settlement terms.

Under the agreement, Topco is prohibited from:

• Communicating with a debtor or anyone else in such a manner as to harass, intimidate, threaten or embarrass, including using profanity.
• Implying that failure to pay a debt will result in a revocation, suspension or impairment of the debtor’s driver’s license.
• Threaten debtors with impairment of their credit rating. However, the company may lawfully report debts to credit-reporting agencies.