Renton-based Convergent Outsourcing has agreed to pay $1.6 million to settle accusations that it sent more than 80,000 collection notices to Washingtonians regarding “zombie debt.”
That’s old debt, which is past the six-year statute of limitations.
“These letters led Washingtonians to believe this company could file a lawsuit against them to collect on this debt,” said Washington Attorney General Bob Ferguson.
Throughout the letter, the company uses the legal term “settlement” or “settlement offer.”
Ferguson said Convergent can’t settle a case that can’t be taken to court.
“And you cannot use deceptive means to collect on a debt even if that debt is owed,” said Ferguson.
But there’s a larger issue. If you make a payment on the zombie debt, it will come back to life.
“So what happens — let’s say you owe 5,000 bucks for student loans. And they try to collect. They can’t file a lawsuit against you,” said Ferguson. “But if you literally pay one dollar, now they can file a lawsuit against you. Now they can go after you in court to collect the remaining $4,999.”
According to court documents, the letters went out during a 46-month period starting in January 2013 and ending November 2016.
Ferguson said the 1,400 Washingtonians who paid Convergent more than $700,000 based on these notices will get refunds.
“And what they’re going to get back is every dime they paid on that debt plus 12% interest. Because that money’s been out there and not in their pocketbooks,” said Ferguson. To read more click here.