Minn. prepares crackdown on debt collectors

Article by: CHRIS SERRES , Star Tribune
Updated: January 28, 2011 - 3:27 PM

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Minnesota Commerce Commissioner Mike Rothman put a number of the state's largest debt collection firms on notice this week that he is prepared to take disciplinary action against them for allegedly failing to conduct criminal background checks on individual collectors.

The eight debt collection firms put on notice include Allied Interstate Inc. of Plymouth, AllianceOne Receivables Management Inc. of Eagan, Bureau of Collection Recovery of Eden Prairie, I.C. System Inc. of St. Paul, Financial Recovery Services Inc. of Edina, NCO Financial Systems Inc. of Mendota Heights, Receivables Management Solutions Inc. of West St. Paul, and Van Ru Credit Corp. of Des Plaines, Ill.

In separate consent orders, Rothman advised the firms that he is "prepared to commence formal action" against their licenses based on allegations that the firms failed to adequately screen individual collector applicants before submitting registration applications.

The firms were told that they may resume registering individual debt collectors after the state commerce commissioner completes a review of their screening process.

A Star Tribune investigation recently found that collectors in Minnesota routinely lie about their criminal backgrounds in order to get work in industry call centers. Their crimes include identity theft, rape, check forgery, assault, and drunken driving offenses.

The investigation found that one in 12 debt collector applicants cleared to work in Minnesota call centers since 2005 had criminal records in the state.

Since 2005, the state Commerce Department has fined at least five collections firms for inadequate screening of new hires.

Chris Serres • 612-673-4308