Debt collectors to pay $75,000 settlement

After a two-year investigation based on more than 100 complaints, a Peabody debt-collection law firm will pay $75,000 and implement procedures to protect indebted consumers under an agreement unveiled yesterday by the state attorney general's office.

Thomas F. Reilly, the attorney general, alleged that representatives of the J.A. Cambece Law Office PC violated state and federal debt-collection laws by using profane language, placing calls to consumers at improper hours, making unauthorized communications with consumers at their places of employment, and failing to provide proof of the validity of debts.

The settlement "imposes restrictions on this firm to protect consumers from abusive practices," Reilly said in a prepared statement. "It also sends a message to the collection industry that abusive tactics will not be tolerated."

In August, the Globe reported that Cambece was being investigated by the attorney general's office. At the time, Nancy Sterling, a spokeswoman for the firm, said the investigation was "based on a small number of complaints."

A Globe Spotlight series in July and August revealed widespread abuses in the debt-collection industry, but the series did not focus on Cambece.

Under the agreement, filed yesterday in Suffolk Superior Court, Cambece assented to a variety of procedures designed to protect debtors. These include recording all telephone conversations with consumers, providing proof of debt -- including at least two monthly statements from the original creditor -- and appointing a supervisor to oversee compliance with state and federal laws.

The settlement also requires Cambece to pay $20,000 in restitution to consumers, $45,000 to a consumer aid fund managed by the attorney general's office, and $10,000 to cover the cost of the state's investigation.

In his statement, Reilly said Cambece cooperated with the investigation. But the firm denies it violated any laws.

"There's no finding by any court that Cambece broke any state or federal law," said Sterling, the spokeswoman for the firm.

The filing "simply confirms a voluntary agreement between the Cambece law firm and the attorney general's office. No enforcement action was filed against the law firm, and no fines or penalties were paid."

Michael Rezendes can be reached at rezendes@globe.com.