[Federal Register Volume 69, Number 169 (Wednesday, September 1, 2004)]
[Notices]
[Pages 53449-53450]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-19968]


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FEDERAL TRADE COMMISSION

[File No. 032 3040]


Applied Card Systems, Inc., et al.; Analysis To Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before September 24, 2004.

ADDRESSES: Comments should refer to ``Applied Card Systems, Inc., et 
al., File No. 032 3040,'' to facilitate the organization of comments. A 
comment filed in paper form should include this reference both in the 
text and on the envelope, and should be mailed or delivered to the 
following address: Federal Trade Commission/Office of the Secretary, 
Room H-159, 600 Pennsylvania Avenue, NW., Washington, DC 20580. 
Comments containing confidential material must be filed in paper form, 
as explained in the Supplementary Information section. The FTC is 
requesting that any comment filed in paper form be sent by courier or 
overnight service, if possible, because U.S. postal mail in the 
Washington area and at the Commission is subject to delay due to 
heightened security precautions. Comments filed in electronic form 
(except comments containing any confidential material) should be sent 
to the following e-mail box: [email protected].

FOR FURTHER INFORMATION CONTACT: Jessica Gray or Barbara Bolton, FTC 
Southeast Regional Office, 225 Peachtree Street, NE., Suite 1500, 
Atlanta, GA 30303, (404) 656-1350 or 656-1362.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Section 2.34 
of the Commission's Rules of Practice, 16 CFR 2.34, notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of thirty (30) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for August 25, 2004), on the World Wide Web, at http://www.ftc.gov/os/2004/08/index.htm. A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington, 
DC 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. Written comments must be submitted 
on or before September 24, 2004. Comments should refer to ``Applied 
Card Systems, Inc., et al., File No. 032 3040,'' to facilitate the 
organization of comments. A comment filed in paper form should include 
this reference both in the text and on the envelope, and should be 
mailed or delivered to the following address: Federal Trade Commission/
Office of the Secretary, Room H-159, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. If the comment contains any material for which 
confidential treatment is requested, it must be filed in paper (rather 
than electronic) form, and the first page of the document must be 
clearly labeled ``Confidential.'' \1\ The FTC is requesting that any 
comment filed in paper form be sent by courier or overnight service, if 
possible, because U.S. postal mail in the Washington area and at the 
Commission is subject to delay due to heightened security precautions. 
Comments filed in electronic form should be sent to the following e-
mail box: [email protected].
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    \1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC Web site, to the extent 
practicable, at www.ftc.gov. As a matter of discretion, the FTC makes 
every effort to remove home contact information for individuals from 
the public comments it receives before placing those comments on the 
FTC Web site. More information, including routine uses permitted by the 
Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

[[Page 53450]]

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement to a proposed consent order from Applied Card 
Systems, Inc. and Applied Card Systems of Pennsylvania, Inc. 
(collectively ``respondents'' or ``ACS'').
    The proposed consent order has been placed on the public record for 
thirty (30) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After the public comment period, the Commission will again 
review the agreement and the comments received and will decide whether 
it should withdraw from the agreement and take other appropriate action 
or make final the agreement's proposed order.
    This matter concerns the debt collection practices of ACS in 
attempting to collect delinquent debt owed or allegedly owed to its 
affiliate, Cross Country Bank (``CCB''). The complaint alleges that 
respondents used unfair debt collection practices in violation of 
Section 5 of the Federal Trade Commission Act (``FTC Act''), 15 U.S.C. 
45. The proposed complaint alleges two counts regarding ACS's debt 
collection practices. First, the complaint alleges that ACS has 
repeatedly called non-debtor third parties in an attempt to either 
speak with a CCB cardholder or get location information about a 
cardholder, after the third parties have informed ACS that they do not 
know the cardholder or that the cardholder does not live at their 
residence. ACS makes these repeated calls without a reasonable belief 
that the third parties now have correct or complete information about 
CCB's cardholders. Second, the complaint alleges that ACS has engaged 
in conduct purposely designed to harass third parties at the number 
called.
    The proposed consent order tracks the complaint and contains 
injunctive provisions designed to prevent respondents from engaging in 
similar acts and practices in the future. Part I of the proposed order 
contains two injunctive provisions. The first prohibits respondents 
from communicating with any third party, for the purpose of acquiring 
cardholder location information, more than once without a request by 
the third party for subsequent calls or a reasonable belief that the 
third party has complete or correct location information for the 
debtor. The second injunctive provision of Part I prohibits respondents 
from engaging in abusive conduct such as continued calls and the use of 
abusive language.
    Part II of the proposed order contains a broad fencing-in provision 
that pertains to all consumers. Among other things, it bars respondents 
from (i) Placing collection calls after 8 o'clock antemeridian and 
before 9 o'clock postmeridian, local time of the person called; (ii) 
placing calls to a consumer's place of employment if they have reason 
to know that such calls are employer-prohibited; (iii) using false, 
deceptive, or misleading representations in collection calls; (iv) 
collecting amounts from consumers that are not legally due; and (v) 
applying payments received to those accounts except as designated by 
consumers.
    Part III of the proposed order requires the respondents to 
distribute copies of the order to certain company officials and 
employees. Parts IV through VI of the proposed order are monitoring, 
record keeping, and compliance provisions. Part VII is a provision 
``sunsetting'' the order after twenty (20) years, with certain 
exceptions.
    The purpose of this analysis is to facilitate public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 04-19968 Filed 8-31-04; 8:45 am]
BILLING CODE 6750-01-P