State sues St. Cloud collection agency and owner

ST. PAUL -- Minnesota Attorney General Mike Hatch sued a St. Cloud collection agency Friday, saying it abused, harassed and deceived consumers in its attempts to collect debts.

Associated Financial Services and its owner, Patrick Kolling, are hired by other companies -- mainly medical and dental offices -- to collect money owed to them.

"These are people who owed medical bills, dental bills," said Deputy Attorney General Lori Swanson. "These are not 18-year-olds who got credit cards for the first time."

AFS far overstepped its legal bounds in trying to collect the money, including swearing, Swanson said.

"They used about every four-letter word in the book," she said.

That's illegal under a law that prohibits collection agents from harassing, oppressing or abusing people they are trying to collect money from.

AFS illegally talked about people's debts with their families, friends or co-workers, according to the 35-page complaint. It allegedly garnished people's wages without their consent and sometimes for more money than they owed.

Additionally, the company allegedly brought lawsuits against consumers that weren't authorized by the companies that hired AFS.

"AFS and its owner have run roughshod over consumer rights and the law in their attempts to collect debts," Swanson said.

A phone call to the company seeking comment wasn't immediately returned.

The attorney general's office has received about 50 complaints about AFS so far -- most with similar stories.

The lawsuit seeks to stop the company from any illegal behavior in the future and for AFS to repay any money that was garnished from people's paychecks that was more than what they owed. The company also can be fined up to $25,000 per violation.

The company also could be penalized by the Minnesota Department of Commerce, which licenses collection agencies.

Companies have a right to collect debt, but they must do it fairly, Swanson said.

The issue is more important now because unemployment is the highest it's been in years, meaning more people are likely to be unable to pay their bills for a time, Swanson said.

The attorney general's office has received complaints about other collection agencies and will look into those.

"Our message to debt collectors is we will take action," she said.

On the Net:

Attorney General's office: http://www.ag.state.mn.us

Consumers who think a debt collector has violated the law can contact the attorney general's office at 651-296-3353 or 800-657-3787 or the Department of Commerce at 651-296-2488 or 800-657-3602.