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- How Can I Deal with NCSPlus Inc?
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NCSPlus, Inc. (NCS) is a third-party collection agency based in New York City. NCS has received consumer complaints alleging violations of the Fair Debt Collection Practices Act (FDCPA), including failure to verify debts and attempting to collect debts not owed. If you have been contacted by NCS, understand your rights before responding.
According to the Better Business Bureau (BBB), NCSPlus, Inc. was founded and incorporated in 2005. The BBB lists NCSPlus, Inc as a collection agency. The BBB also lists an alternate website for NCSPlus, Inc at www.nationalcrdit.com; this web address leads to a page warning that the site is known to contain malware. Buzzfile estimates NCS’ annual revenue at $4.9 million and the size of its staff at 41 people.
According to its website, NCSPlus, Inc “is an Accounts Receivable Management firm, working to recover slow and delinquent accounts for over 25,000 companies, institutions, and medical practices throughout the country.” As a full-service third-party collection agency, NCS offers skip tracing, letter writing, telephone services, and account management.
NCS’ “third-party intervention may be broken down into four distinctive parts:” reporting debts to the three major credit reporting agencies; reinitiation of the dialog with debtors; potential legal action for harder-to-collect delinquencies; and using the negative reputation of collection agencies to influence the behavior of consumers. NCSPlus does not offer specific information about the industries for which it collects, but does indicate that they have “clients in over 200 categories of business including doctors, dentists, chiropractors, video stores, manufacturers, importers, and publishers…including The American Chiropractor’s Association, the Valueline Investment Survey, New York University, and New York Magazine.”
NCSPlus’ website contains a lot of information about its “unique flat-rate system.” This system allows creditors to place accounts with NCS for collection for a one-time flat fee, rather than a percentage based on the type or size of the account. This fee averages to a rate of about 10%, which is much lower that industry standards, which NCSPlus reports are about 40% to 50%. Furthermore, their flat-rate, “no strings” system allows creditors reluctant to commit to agencies who use percentage-based contracts to place accounts for collections earlier, resulting in higher recovery amounts.
NCSPlus’ website does not contain any information about its compliance policies or training programs. There are links to the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FCPA) on their FAQ page, but there is no page dedicated to consumer resources.
The BBB has closed 27 complaints against NCSPlus, Inc in the past three years, with 7 closed in the past 12 months. Most of those complaints allege problems with billing and collections. Since December 2015, the Consumer Financial Protection Bureau (CFPB) has received 6 complaints about NCS. Justia lists at least 7 cases of civil litigation involving NCSPlus.
Absolutely. Here are some Sample Cases against NCSPlus Inc.
In May 2012, in New York County Supreme Court, a judge issued an opinion in a case alleging breach of contract. In this case, NCSPlus, Inc was defending itself against claims by one of its clients that they had failed to uphold their contractual obligation to collect the delinquent accounts that had been assigned to them. Specifically, NCS entered into a contract with the creditor to collect a total of $149,701.89 in rent money owed by former tenants of the properties managed by the creditor. The creditor paid NCS a $1,000 fee to place the delinquent accounts, but after two years, NCS had only recovered $750 in the total amount placed. As a result, the creditor withdrew its accounts from NCS for non-performance, and NCS attempted to collect a penalty for breach of contract in the amount of $46,550.96. This amount is what NCSPluswould have received if they had successfully collected all of the delinquencies assigned by the creditor.
The creditor argued that NCS failed to send the entire contract at signing, leaving out the page that contained legal information about penalties. They also argued that the penalty is unenforceable because it represents the value of what NCS would have lost if they had collected 100% of the delinquent accounts, rather than the probable loss based on a realistic estimate of what they may have recovered. In addition, because the contract has no expiration date, the creditor argued that NCS placed them in a position in which NCSPlus waited and did nothing until the statutes of limitation on the delinquent accounts expired, then claimed the 100% recovery fee after forcing the creditor to withdraw the accounts to pursue litigation. The creditor also alleged that NCS did not pursue any effective collection efforts during the time they administered the accounts. These specific allegations amounted to a charge that NCSPlus had breached implied covenant, good faith, and fair dealing, rendering the contract unconscionable and unenforceable.
NCSPlus argued that contracts between collection agencies and merchants are not governed by the same laws as those governing relationships between collection agencies and consumers. In addition, their penalty fee is intended to protect against merchants who may “unilaterally withdraw the claims after collection services are performed and/or monies received by the client prior to the withdrawal without NCS’ knowledge.”
The court disagreed with the creditor’s allegations that NCSPlus had acted in bad faith, or that their contract was written to enable fraud, citing the creditor’s failure to provide any specific evidence supporting such claims. In addition, although NCS may have failed to send the entire contract to the creditor prior to signing, the creditor was under no obligation to sign the contract if they had been unsatisfied. However, the court agreed that the withdrawal fee was an unenforceable penalty because it represented a lack of contractual consideration. The withdrawal fee represented an amount equal to what NCSPlus would have collected if they had fully collected 100% of the amounts assigned, and there is no expiration date. Furthermore, NCS “failed to submit any evidence indicating that the amount of the withdrawal fee actually represented the anticipated loss of the value of the collection work performed on any one of the defendant’s accounts.” This lack of consideration for a fair exchange between the two parties rendered the fee unenforceable.
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Understanding Your Debt Collection Rights
The Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA) are federal laws that regulate the collections industry. The FDCPA prohibits actions such as using tactics intended to harass, oppress, or annoy consumers. The FCRA regulates how collection agencies report information to credit reporting agencies. Additional consumer protection laws include the Consumer Financial Protection Act (CFPA) and the Telephone Consumer Protection Act (TCPA). These laws are enforced by federal agencies such as the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB). The complaints above illustrate why it is important to understand your rights and responsibilities under these laws when you are attempting to communicate with collection agencies.
In addition, these laws provide individuals with a means to seek monetary damages in court. For example, the FDCPA allows consumers to recover damages of up to $1,000, plus attorney fees and court costs, in cases proving violations of the FDCPA. Seek legal assistance if you are trying to resolve a dispute with a collection agency.
Your debt harassment checklist:
- You are receiving multiple calls per week from third party collection agencies
- You are receiving early morning or late night calls from debt collectors
- You are recieving calls at work from a debt collection agency
- Debt collectors are calling your friends, neighbors, or coworkers
- Collectors are threatening you with violence, lawsuit, or arrest
- A debt collector attempts to collect more than you owe
- You are being threatened with negative credit reporting
- A debt collector attempts to intimidate you
- Criminal accusations are being made towards you
- Use of obscene language during an attempt to collect
- Automated robocalls are being made to your phone in an attempt to collect
If you’ve been harassed by debt collectors and even one of these has happened to you, we can help. We will fight for your rights.
The Lemberg Law legal team is committed to holding debt collectors accountable, so complete our form for a FREE case evaluation, or call 844-685-9200.
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