State shuts down Bloomington collection agency
The Minnesota Department of Commerce has suspended the collection agency license of Bloomington-based International Collection Services, accusing the company of misappropriating more than $125,000 from clients in the last three years.
According to the department's allegation, ICS used customer funds to conduct business instead of remitting the money to its clients within 30 days of collection, as required by Minnesota law.
Officials with the Bloomington Police Department and Department of Commerce executed a search warrant on June 9, and recovered financial records and computers from the company and its owner, Tim Peters.
The search warrant was necessary because Peters refused to grant access to the company's records, another violation of Minnesota law, according to officials with the Department of Commerce.
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Multiple phone calls by Minnesota Public Radio to the International Collection Services went unanswered Thursday.
On its Web site, the company says it works on a contingency basis and only gets paid if it collects on a client's debt.
"We are so confident in our ability to collect that we will attempt to collect your debt for FREE," according to a message on the Web site's homepage. "If we can't collect, then you owe us nothing!"
The department received complaints from two out-of-state clients of ICS, alleging they had not received money owed to them after ICS had collected on accounts due, according to officials with the Department of Commerce.
Based on the complaints, investigators conducted an audit of the company's trust accounts and allegedly found that, in addition to misappropriating client funds, the company also used that money to pay for operating expenses and to pay off Tim Peters' personal credit card bills.
"Consumers have an expectation that when a collection agency collects your money to pay a bill, they actually pay the creditor on your behalf, not spend the money on their own bills," Minnesota Commerce Commissioner Glenn Wilson said in a statement. "When a breach of trust like this occurs, we suspend the license and shut down the agency."
A court hearing is scheduled for June 29 in St. Paul.
ICS is not affiliated with I.C. Systems, a collection agency based in St. Paul.