Direct Recovery Services is a debt collection agency that contacts consumers to collect past due debts owed to various original creditors. There has been some debate over whether Direct Recovery Services is a legitimate and lawful company or if they operate illegally and make false threats and claims when contacting alleged debtors.
What does Direct Recovery Services do?
Direct Recovery Services operates primarily as a third-party debt collection agency. They are contracted by various original creditors and debt buyers to contact consumers and collect on accounts where the consumer has fallen behind on payments or defaulted on the debt. Some of the types of debts Direct Recovery Services attempts to collect on include:
- Past due credit card bills
- Personal loans
- Auto loans
- Medical bills
- Telecommunications and utility bills
When an original creditor determines an account is severely delinquent, they may write the debt off and sell it to a debt buyer for a fraction of the total amount owed. The debt buyer then contracts with a collection agency like Direct Recovery Services to contact the consumer and attempt to collect on the purchased debt. Direct Recovery Services collects a percentage of any debts they successfully collect.
Contact and collection practices
Direct Recovery Services uses phone calls, letters, and emails to contact alleged debtors. Some of their more common practices include:
- Calling landlines and cell phones repeatedly
- Leaving voicemails requesting a return call
- Sending letters requesting payment
- Emailing debtors if an email address is available
- Contacting references provided by the original creditor
- Attempting to locate updated contact information if messages are unanswered
These practices in themselves are legal debt collection methods. However, many consumer complaints about Direct Recovery Services accuse them of illegal and harassing tactics such as:
- Calling repeatedly and continuously
- Calling before 8 am or after 9 pm
- Threatening legal action or arrest
- Failing to provide proof of the debt if requested
- Contacting a debtor’s workplace after being told not to
- Discussing the alleged debt with unauthorized third parties
These types of contacts would be violations of consumer protection laws like the Fair Debt Collection Practices Act (FDCPA).
Are they a real company?
Direct Recovery Services is a legitimate debt collection agency and business. They are incorporated in the state of California and licensed to operate there. Available information indicates they have been in business for over 10 years.
Some key facts that point to Direct Recovery Services being a real company include:
- They are registered with the California Secretary of State as an active corporation.
- They hold an Active license with the California Department of Business Oversight.
- They have an active business website and contact information.
- They report employee figures, revenue, and other data to data aggregators such as Buzzfile.
- They have verifiable business addresses and call centers.
So in terms of legitimacy as a registered and licensed business entity, Direct Recovery Services does appear to be a real debt collection company. Their corporate status and work in the collection industry does not however make them immune from violating debtor protection laws and fair practices.
Are their collection practices legal and ethical?
Whether Direct Recovery Services operates legally and ethically in their interactions with alleged debtors is more difficult to conclude definitively. In general, these are some factors to consider:
- They are subject to following federal laws like the FDCPA and FCRA when collecting debts.
- If licensed in a state, they must follow state debt collection laws and consumer protection codes.
- Ethically, they should be transparent and only use truthful representations.
- Collectors cannot harass, threaten, or abuse consumers when contacting them.
Based on the high volume of complaints reported against Direct Recovery Services for unfair practices like excessive calling and failing to verify debts when requested, they often appear to cross ethical and legal bounds in their collection activities.
Some examples of questionable or illegal practices based on consumer complaints:
| Allegation | Related Law |
|---|---|
| Calling a debtor up to 15 times a day | FDCPA – Harassment or abuse |
| Refusing to provide written validation of the debt | FDCPA – Validation of debts |
| Threatening to sue on expired debt | FDCPA – False or misleading representations |
| Calling employer after being told not to | FDCPA – Communication with third parties |
These examples demonstrate cases where Direct Recovery Services potentially violated consumer protection laws based on the reported circumstances. However, it should be noted that:
- The details in consumer complaints are often only one side of the story.
- Not all complaints necessarily reflect the typical practices of the company overall.
- Some complaints may be resolved or disputed successfully by the company.
How to Handle Calls or Letters
If you are contacted by Direct Recovery Services about a debt you believe is inaccurate or untimely, there are steps you can take to exercise your rights under the FDCPA:
- Request written validation of the debt if you dispute or don’t recognize it. Collectors must provide this within 5 days.
- Review the validation and ensure the debt is yours and the details are correct.
- Send a debt validation letter requesting verification if disputes are unresolved.
- Submit a complaint to the FTC if unlawful collection practices are used.
- Notify the collector in writing if you want communications to stop.
- Consult with a consumer protection attorney about potential recourse if you have sufficient evidence.
References
- Direct Recovery Services – Contact Us. https://directrecoveryservices.com/contact-us/
- Direct Recovery Services, Inc. – Company Profile. https://www.buzzfile.com/business/Direct-Recovery-Services,-Inc.-562-430-8484
- Direct Recovery Services, Inc. – Corporation Wiki. https://www.corporationwiki.com/California/Huntington-Beach/direct-recovery-services-inc/42341713.aspx
- Direct Recovery Services – Complaints. https://www.complaintsboard.com/direct-recovery-services-b128041
- What is the Fair Debt Collection Practices Act? https://www.consumer.ftc.gov/articles/debt-collection-faqs
Conclusion
In summary, Direct Recovery Services operates legally as a real debt collection company but has generated a pattern of complaints about potentially unfair and illegal practices. If contacted, consumers should know their rights and seek debt validation if appropriate. While not every complaint is necessarily accurate, Direct Recovery Services does appear in many cases to cross ethical lines in their collection communications and tactics according to consumer reports.