FOR IMMEDIATE RELEASE                                         CIV
WEDNESDAY, MARCH 8, 1995                           (202) 616-2765
                                               TDD (202) 514-1888

                                 
  PAYCO PAYS LARGEST PENALTY EVER FOR DEBT COLLECTION VIOLATIONS


     WASHINGTON, D.C. -- One of the nation's largest debt
collection firms, Payco American Corporation, today agreed to pay
a $500,000 civil penalty, the largest ever imposed under the Fair
Debt Collection Practices Act, to settle allegations it harassed
consumers in collecting money on behalf of creditors, the
Department of Justice announced. 
     The company, headquartered in Brookfield, Wisconsin, was
accused of such things as falsely threatening to have attorneys
as collectors, using obscene and profane language and making
repeated phone calls, sometimes late at night or early in the
morning.
     Payco, in settling the case, agreed to not only abide by the
law but also advise consumers and their employees of a consumer's
rights under the law.  
     Frank W. Hunger, Assistant Attorney General for the Civil
Division, and Thomas Schneider, U.S. Attorney in Milwaukee,
Wisconsin, said the consent decree filed in U.S. District Court
in Milwaukee resolves a complaint the Department filed in August
1993 at the request of the Federal Trade Commission.  Payco,
which collects debts from consumers on behalf of credit card
companies, health care providers, educational institutions and
retailers,  did not admit liability.         
     The Department said today's decree was the most stringent
ever obtained under the act, while the $500,000 penalty more than
tripled previous penalties imposed for violations of the act.  
     Hunger said, "I am confident that the resolution of this
case will result in increased compliance with the act, not only
by Payco but also by the debt collection industry at large."
     The Fair Debt Collection Practices Act is a federal law that
regulates the behavior of debt collection agencies when they
attempt to collect debts on behalf of creditors.  The
government's suit against Payco alleged that the company violated
the act by, among other things:
     --Contacting consumers at their jobs even though Payco knew
or had reason to know that the employers prohibited such
contacts.

     --Contacting consumers at times that Payco knew or should
have known were inconvenient, such as before 8:00 a.m. or after
9:00 p.m..

     --Communicating about alleged debts with persons other than
the consumer without having obtained the consumer's permission.

     --Making repeated telephone calls to annoy or harass the
person receiving the calls.

     --Falsely threatening to have consumers arrested or have
their property seized or wages garnished for nonpayment of debts.

     --Making other false representations and using false names
in attempting to collect debts.
     Today's decree prohibits Payco from violating the act in any
of those specific ways or in any other way.  
     It also requires Payco to tell consumers when it writes to
them the first time of their right under the act to have Payco
stop communicating with them about a debt.  Payco also is
required to advise its employees in writing of their obligation
to comply with the act.  
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95-131