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Debt collectors with govt contracts paid penalties
Private debt collectors with contracts from Ed Dept. paid civil penalties in consumer cases
By The Associated Press

WASHINGTON (AP) ' Two private debt collection companies that work for the Education Department paid more than $4 million combined in civil penalties within the past year after another federal agency accused them of using obscene language with consumers, making illegal threats and committing other violations.

One of the companies, West Asset Management Inc., agreed in March to pay $2.8 million, a sum the Federal Trade Commission says is the largest civil penalty it has ever obtained in a debt collection case.

The second, Allied Interstate Inc., agreed in October 2010 to pay $1.75 million.

As part of their agreements, neither company admitted violating federal law, and both agreed not to do so in the future.

Education Department officials were aware of the enforcement actions at the time.

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