Washington State Attorney General Bob Ferguson recently announced that Renton-based collection agency Convergent will pay more than $1.6 million over misleading letters it sent to Washingtonians. The letters contained “settlement offers” to settle debts, including student loans, but failed to disclose that Convergent could not enforce the debt in court. The term “settlement offer” deceptively suggested the possibility of litigation to collect the debt. As a result of the Attorney General’s case, the 1,405 Washingtonians who sent money to Convergent will get back the money they sent to the company, plus interest — a total of nearly $710,000.
The payments will range from around $9 to more than $20,000. These payments will reflect how much Washingtonians paid and include interest accrued since 2014. These payments from the Attorney General’s Office (AGO) will begin to go out to affected individuals over the next two to three months. People do not need to take any action to receive this money.
In Washington, the statute of limitations on debt collection lawsuits is six years after the date of default or last payment on the debt account. Once a debt is past the statute of limitations, debt collectors can still attempt to collect on these debts, but they cannot file a collection lawsuit. None of Convergent’s 80,285 letters to Washingtonians disclosed that the debts were past the statute of limitations, which Ferguson asserted violated the state’s Consumer Protection Act.
“Debt collectors are not allowed to deceive Washingtonians,” Ferguson said. “Today’s resolution holds this large, sophisticated debt collection corporation accountable for its unlawful conduct that put its profits above the law.”
According to the AGO, Convergent collected on accounts of major corporations around the country, including Verizon, Sprint, T-Mobile, Dish Network and PayPal, as well as debt buyers like Palisades Collection, Galaxy Asset Purchasing and Pinnacle Credit Services.
Ferguson filed a consumer protection lawsuit against the company in June 2020 for sending “settlement” offer letters that created a deceptive impression that Convergent could sue people for stale debt when it could not. The letters implied Convergent would sue if people did not pay.
As part of the agreement, Convergent has agreed to a nationwide injunction that will prohibit it from using the words “settle” or “settlement” when attempting to collect on time-barred debts. The agreement requires the company to disclose that the statute of limitations to sue on the debt has passed.
In total, Convergent will pay $1,675,000 to the Attorney General’s Office, including payment to cover the costs of the case and fund future investigations and enforcement of the Consumer Protection Act.
