NEW ORLEANS and WASHINGTON, D.C. — Panel discussions about
collections at events hosted by the National Alliance of Buy-Here, Pay-Here
Dealers sometimes stir the most attention from conference goers.

This week's enforcement action revealed by the Federal Trade
Commission regarding the illegal use of text messages in collections likely will
give panelists and attendees at the NABD East Coast Conference even more to
discuss.

Officials indicated a Glendale, Calif.-based debt collector
will pay $1 million to settle FTC charges that the defendants violated federal
law. This is the first FTC action against a debt collector who used text
messaging to attempt to collect debts in an unlawful manner.

The FTC alleged that Archie Donovan and two companies he
controls — National Attorney Collection Services and National Attorney Services — used English- and Spanish-language text messages and phone calls in which
they unlawfully failed to disclose that they were debt collectors. 

The FTC charged the defendants with violating both the Fair
Debt Collection Practices Act and the FTC Act.

In their text messages, phone calls, and mailings, the FTC
said the defendants also falsely portrayed themselves as law firms by using the
names National Attorney Services, National Attorney Service, National Attorney and Abogados Nacionales. 

Building on their deceptive company name, officials stated the
defendants falsely threatened to sue consumers for not paying their debts or to
garnish their wages.

The FTC also alleged that Donovan and his companies
illegally revealed debts to the consumers' family members, friends and
co-workers. Among other tactics, the defendants used mailing envelopes
picturing a large arm shaking money from a consumer who is strung upside
down.  The law does not allow debt
collectors to disclose publicly someone's private debts, because doing so could
endanger their jobs and reputations. 

Mailing envelopes can include only the name and address of
the company, and cannot indicate that the consumer may owe a debt, according to
the FTC.

In addition to the $1 million civil penalty, the settlement
requires the defendants to stop sending text messages that do not include the
disclosures required by law, and to obtain a consumer's express consent before
contacting them by text message. The defendants also are barred from falsely
claiming to be law firms, and from falsely threatening to sue or take any
action such as seizure of property or garnishment that they do not actually
intend to take.

"No matter how debt collectors communicate with consumers –
by mail, by phone, by text or some other way – they have to follow the law,"
said Jessica Rich, director of the FTC's bureau of consumer protection.  "The FTC has a zero tolerance policy for
deception."

NABD dedicated an hour-long panel discussion to collections
on the closing day of its East Coast Conference. The event — the first time the
alliance will conduct one of its major conferences in New Orleans — runs from
Nov. 3-5 at the Hyatt Regency Superdome.

The conference begins with concurrent workshops covering 12
topics of timely importance. These workshops feature industry experts,
including leading attorneys Tom Hudson, Terry O'Loughlin and David Bafumo.

"These workshops will be highly interactive and will not be
infomercials," NABD founder and conference chairman Ken Shilson said. "For
instance, we have added operators to several of the workshop panels to provide
a user's perspective on various products and services which increase efficiency
and profitability. Successful operators today spend every dollar wisely. These
sessions are very timely."

General education sessions will start on the second day of
the conference, featuring new topics and speakers not previously included in NABD's
annual conference this past May in Las Vegas. Along with BHPH industry benchmarks,
Manheim chief economist Tom Webb will discuss the used-vehicle marketplace and
industry economics.

Some of the nation's most successful operators will provide
tips and techniques on best operating practices and collections. A panel of
experts will discuss new inventory sourcing technology. In addition,
roundtables have been added covering inventory, capital, compliance, and
technology where attendees can individually interact with speakers and experts.
The program also features two compliance sessions covering a regulatory update
on the Consumer Financial Protection Bureau and new legal issues.

"The New Orleans conference provides new information of
vital importance to help operators be successful in 2014," Shilson said.

NABD arranged discounted room rates of $169 per night at the
Hyatt Regency Superdome, which was the host hotel for the Super Bowl this past
February. The discount expires Oct. 4 or until supplies are gone.

"The new venue, the exceptional facilities, timely
information, and some great New Orleans cuisine make this conference a
must-attend for everyone," Shilson said.

Reservations can be made online at www.bhphinfo.com or by
calling (832) 767-4759.

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