WASHINGTON — One of the nation’s largest consumer debt buyers will pay a $2.5 million civil fine to settle deception allegations.
The Federal Trade Commission said Monday that Michigan-based Asset Acceptance agreed to the penalty and to changes in the way it collects debt. The company buys unpaid debts from credit card companies, utilities, health clubs and others.
The FTC alleged that Asset tried to collect debt in some cases that wasn’t even owed.
In other cases, the FTC says the company told consumers they owed a debt that may have been too old to collect because it was past the statute of limitations. Making a payment could then re-start the clock on the debt and allow collectors to take legal action.
Because of the volume of accounts Asset handles, in the tens of millions, the FTC said it was hard to estimate how many consumers were impacted by the practices the agency said the company used.
“Most consumers do not know their legal rights with respect to collection of old debts past the statute of limitations,” said David Vladeck, director of the agency’s bureau of consumer protection. “This FTC settlement signals that, even with old debt, the prohibitions against deceptive and unfair collection methods apply.”
As part of the proposed settlement, Asset Acceptance, based in Warren, Mich., will have to tell consumers that their debt may be too old to be legally enforceable and that it won’t sue to collect on that debt.
The company also will be barred from noting debt on a consumer’s credit report without informing the consumer about the negative report.
Parent-company Asset Acceptance Capital Corp. said the agreement ends an FTC investigation begun in February 2006 “without any admission by Asset Acceptance of the FTC’s claims.” It added that the company “does not expect the operational requirements of the consent decree to have a material adverse effect on its business.”
Japanese auto suppliers to pay price-fixing fine
WASHINGTON — Two Japanese auto suppliers have agreed to pay more than half a billion dollars in criminal fines for a price-fixing conspiracy in the sale of parts to U.S. automakers, the Justice Department announced Monday.
Yazaki Corp. agreed to pay a $470 million fine, the second-largest criminal fine obtained for an antitrust violation. The second company, DENSO Corp., agreed to pay a $78 million fine. Four Yazaki executives, all Japanese citizens, will serve up to two years in U.S. prison as part of the deal to plead guilty to one felony count.
The pleas are part of an ongoing investigation that is the largest ever in the Justice Department antitrust division. Sharis Pozen, the division’s acting head, told reporters in a briefing that “pernicious cartel conduct” in the auto parts industry has harmed car buyers and auto manufacturing businesses nationwide. “The numbers that we are talking about here are astronomical,” she said.
Court documents filed in federal court in Detroit say the Japanese companies and executives sold automotive electrical components to automakers in the United States and elsewhere at inflated prices. The Justice Department says they met to monitor and enforce adherence to the bid-rigging and price-fixing scheme from at least January 2000 through February 2010.
Goldman Sachs among banks fighting for swaps books exemptions
WASHINGTON — More than half of the derivatives- trading business of Goldman Sachs, Morgan Stanley and three other large banks could fall largely outside the Dodd-Frank Act if they succeed in lobbying regulators to exempt their overseas operations, government records show.
The debate over the reach of Dodd-Frank has been among the most contentious aspects of the regulatory overhaul enacted by President Barack Obama after the 2008 credit crisis. The banks have met with regulators, testified to Congress and filed dozens of letters contending that they will suffer a competitive disadvantage if the regulations apply to their foreign arms.
Banking lobbyists have been gaining traction with their argument that a combination of U.S. supervision of their holding companies and foreign supervision of their operations abroad is sufficient to oversee risk to the financial system.
While the banks haven’t publicized how much of their swaps business is overseas, they file quarterly statements to the Federal Reserve. A Bloomberg News analysis of the filings shows that Goldman Sachs had 62 percent of its $134 billion in fair- value derivatives assets and liabilities in non-U.S. branches or subsidiaries for international banking as of Sept. 30, while 77 percent of Morgan Stanley’s $101 billion was in non-U.S. operations.
If overseas operations aren’t subject to U.S. rules or equivalent regulation by other nations, it could impede the goal of preventing another credit crisis, Darrell Duffie, professor at Stanford University’s Graduate School of Business, said in a telephone interview.
“Not only is that neglectful from a viewpoint of systemic risk as it sits today, but it’s also an incitement to move the risk abroad,” Duffie said.
The Fed filings show that JPMorgan Chase had 59 percent of its $188 billion in overseas branches or international affiliates; Citigroup had 53 percent of $122 billion; and Bank of America had half of $125 billion in non-U.S. operations in the same period.
The fair-value assets and liabilities include the value of interest rate, foreign exchange, commodity, equity and credit derivatives that are held for trading purposes and marked at market prices.
Lockheed Martin leads expanded lobbying by defense industry
WASHINGTON — Defense contractors Lockheed Martin, General Dynamics and Raytheon spent a combined $33.4 million on lobbying in Washington last year, a 10 percent increase from 2010, as Congress and the Obama administration weighed cuts in the Pentagon budget.
A review of lobbying disclosures filed with the Senate by a Jan. 20 deadline showed Bethesda, Md.-based Lockheed Martin, the world’s largest defense company, led such spending last year with $15 million for lobbying, a 19 percent increase.
Pentagon contractors face an era of limited government spending after an impasse on how to cut the federal budget left open the prospect of $1 trillion in defense cuts over a decade. Even with future cuts looming, defense companies focused their lobbying last year on protecting contracts and programs from immediate cuts, according to Michael Herson, president of American Defense International, a defense lobbying and business-development firm in Washington.
“The contractors were focused on their programs in fiscal year 2012 — that was the more certain problem at hand,” Herson said in a Jan. 23 interview.
General Dynamics of Falls Church, Va., the maker of Abrams tanks and Gulfstream business jets, spent $11.3 million on lobbying last year, a 4.6 percent increase. Raytheon of Waltham, Mass., the world’s largest missile maker, spent $7.1 million, a 2.9 percent increase.