G C Services Corp

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF G C SERVICES CORP., ET AL.

MODIFYING ORDER IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND FAIR DEBT COLLECTION PRACTICES ACTS Docket C-2511. Consent Order April 1974-Modifying Order, Feb. , 1983 This order reopens the proceeding and modifies the Commission s order issued on April , 1974 (83 F. C. 1521), modified June, 1978 (91 F. C. 1150), by deleting Paragraph Six from the order and substituting a new Paragraph Six, which incorporates restrictions concerning the use of post-dated checks contained in Section 808(2), (3) and (4) of the Fair Debt Collection Practices Act. ORDER REOPENING PROCEEDING AND MODIFYING ORDER TO CEASE AND DESIST By petition fied September 21, 1982, pursuant to Rule 2. , petitioners G C Services Corporation and Jerold B. Katz, William A. Inglehart and Martin M. Katz, C'GCSC"), request the Commission to reopen this proceeding and modify Paragraph 6 ofthe Order to Cease and Desist issued on April 16, 1974, and amended on June 21, 1978. Paragraph 6, as written in the original 1974 Order, prohibited GCSC from receiving from debtors post-dated checks which would not be deposited immediately or which would be held for more than 15 business days after their receipt. On June 21, 1978, the Commission modified this Order Paragraph to permit GCSC to hold debtor checks up to 60 days provided GCSC complied with certain conditions including the requirement that GCSC make a good faith effort to reach debtors by attempting to contact them by telephone three times to obtain their permission to deposit any post-dated checks. The present petition seeks modification of Paragraph 6 by eliminating, 1) the 60 day period limitation for GCSC's holding of post-dated checks and 2) the telephone contact requirement. In place of the current Paragraph 6, GCSC requests that the Section 808(2), (3) and (4), ofthe FDCPA, as well as other requirements, be incorporated into the Order. In addition to being bound by the FDCP A requirements GCSC requests that the Order prohibit respondents for a period of 5 years from accepting a check post-dated by more than 60 days unless the debtor is given, along with the notice required by Section 808(2) of the FDCPA, a notice, a) of the date and amount of each additional post-dated check that GCSC holds and intends to cash and b) that advises the debtor to contact GCSC in the event the debtor is unable to cover the check to arrange a revised payment schedule. Additional- ,, ..

u v __M- - Modifying Order ly, GCSC would be required to return to the debtor, when so asked any post-dated check that the debtor is unable to cover. In support of their request, petitioners assert that the current restrictions in Paragraph 6 are unnecessary in view ofthe requirements and restrictions set forth in Section 808 of the FDCP A which are binding on GCSC as a debt collector. The current Order restrictions on GCSC, petitioners argue, places them at a competitive disadvantage. Further, the telephone debtor contact required by the current Paragraph 6 is not only burdensome to GCSC but bothersome to consumers as well.

The Commission, having considered the petition, is of the opinion that petitioners have made a suffcient showing of changed conditions oflaw and fact to reopen the proceeding, and have decided to grant their request. However, the Commission is persuaded that incorporation of Section 808(2), (3) and (4) into the Order would provide adequate protection for consumers and that the additional restrictions proposed by petitioners are not necessary. Petitioners have agreed to this change.

Accordingly, it is ordered that the proceeding be, and it hereby is reopened.

It is further ordered That the Order to Cease and Desist be, and it hereby is, modified by striking Paragraph Six, amended on June 21 1978, and substituting therefor the following: 6. (a) Accepting from any person a check or other payment instrument post-dated by more than five days unless such person is notified in writing of the intent to deposit such check or instrument not more than ten nor less than three business days prior to such deposit; (b) Soliciting any post-dated check or other post-dated payment instrument for the purpose of threatening or instituting criminal prosecution;

(c) Depositing or threatening to deposit any post-dated check or other post-dated payment instrument prior to the date on such check or instrument.

Modifying Order 101 F,