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What is NCO Financial?
NCO Financial Systems is a debt collection agency that was founded in 1926. They’ve changed ownership multiple times in the past few years. 1
Most recently, a large company called Alorica purchased NCO Financial’s holding company, Expert Global Solutions, in 2016. 2
All of the following names may be associated with NCO Financial:
- NCO Collection Agency
- NCO Financial Systems
- NCO Financial Services
- NCO Credit
- NCO Group
- NCO Portfolio Management
- EGS Financial Care, Inc
- EGS FC
NCO Financial Systems might appear under any of those names on consumer credit reports.
What is Alorica and how is it different from NCO Financial Systems?
Even though Expert Global Solutions was bought by Alorica, they’re still a licensed debt collection agency under the name EGS Financial Care, Inc. 5
What’s more, Alorica states in a disclosure on their website that many of their subsidiaries operate under the brand Alorica but remain separate legal entities. This could mean that you’ll still see NCO Financial Systems on your credit report or in correspondences addressed to you, even though they don’t operate as an independent company.
Who does NCO Financial collect for?
NCO Financial used to be a prominent collector of student loan debt, and they held a contract with the US Department of Education to collect federal student loan debt between 2005 and 2010. 6 Before they were acquired by Alorica, NCO Financial also collected medical, credit card, and student loan debt. 7 8 9
Currently, Alorica serves companies in a wide array of industries, including financial technology, ecommerce, and subscription services. 10
Is NCO Financial a scam?
If someone contacts you claiming to be a representative of NCO Financial Systems, it’s probably not a scam. It’s not entirely clear whether the agency (now a subsidiary of Alorica) still collects debt under their original name, but several signs suggest that they do.
For instance, NCO Group subsidiaries have several pages on the Better Business Bureau (BBB) and Dun & Bradstreet (D&B) websites, and they’re still included in online state government systems. 11 12 13
However, scammers do sometimes pose as representatives of legitimate debt collection agencies, and the murky status of NCO Financial and Alorica means you should exercise extra caution when dealing with them, even though they’re legitimate organizations.
Always be sure to verify any debts you’re contacted about before you pay them, and never give out personal details (like your credit card information or Social Security number) over the phone.
NCO Financial lawsuits
Even though NCO Financial Systems wasn’t a scam, they faced quite a bit of high-profile litigation before they became part of Alorica.
For example, the Federal Trade Commission filed two lawsuits against NCO Financial’s parent company NCO Group for violating consumer rights—NCO Financial settled the largest of these lawsuits for $3.2 million in 2013. 16 17
Most recently, NCO Financial faced a consent order from the state of Arizona alleging violations of federal and state laws. 18
This history of litigation provides another reason to be cautious if someone contacts you under the NCO Financial Systems name.
VIDEO: NCO Financial Systems in 2 Minutes—Fix Your Credit Report & Know Your Rights
How to stop NCO Financial Systems from calling you
NCO Financial Systems will call, email, or mail you if they believe you have an unsettled debt. The reason debt collectors like these are calling you is simple—they want to pressure you into paying up.
Unfortunately, NCO Financial Systems representatives will keep trying to contact you unless you pay the debt, prove that it doesn’t belong to you, or reach an agreement with them (or with your original creditor).
Don’t ignore debt collectors like NCO Financial Systems—in the end, you may get sued, and you may even have your wages garnished. It’s smarter to engage with them tactically to ensure you don’t have to pay, or that you get the best deal you can.
To begin, you can get NCO Financial Systems to stop calling you—at least temporarily—by sending them something called a debt verification letter.
Send a debt verification letter
A debt verification letter is a formal request that obligates a debt collector to provide further evidence of a debt. You must send it within 30 days of them first contacting you. Note that NCO Financial Systems should have sent you a debt validation letter proving you owe the debt first, as it’s required by law.
Benefits of sending a debt verification letter
Sending a debt verification letter has three benefits:
- You’ll prevent NCO Financial Systems from calling you during this period: When you send a debt verification letter, third-party debt collection agencies like NCO Financial Systems are required by law to stop contacting you until they can provide evidence that you actually owe the debt they’re trying to collect. 19
- You’ll get more information about the debt: You should never pay a debt that you don’t recognize. Forcing NCO Financial Systems to provide documentation will help you determine whether this is a legitimate debt that you actually need to pay. It’s an easy way of figuring out if the debt collector is a scam agency.
- You may successfully disown the debt: If NCO Financial Systems can’t provide more information about the debt (which is frequently the case), then they have no choice but to delete it from your records.
Beware the statute of limitations
The verification materials that you receive may show that your debt has passed the statute of limitations. This is a legal limit that means the debt is too old for NCO Financial Systems to sue you over, at which point it’s known as time-barred debt.
If this is the case, you can send NCO Financial Systems a letter telling them to stop contacting you. Legally, they’ll have to abide by that.
The statute of limitations on most debts is between 3 and 6 years, but the exact amount of time depends on several factors, including the state you live in. The best approach is to check your state attorney general’s website and email their office if the information you’re looking for isn’t available online.
How to remove NCO Financial Systems from your credit report
If your credit score is suffering as a result of NCO Financial Systems debt, there are three ways to recover:
1. Dispute the debt with all three credit bureaus
You should immediately dispute the debt if it isn’t yours. You can also dispute debts that are older than 7 years (measured from the date of your first missed payment)—by law, they’re supposed to fall off your credit report by then.
To dispute a debt for free, send a credit dispute letter to the credit bureaus that are showing NCO Financial Systems on your credit report.
To find out which credit bureaus you need to send the letter to, request your free credit report from each of the major credit bureaus (Experian, Equifax, and TransUnion) at AnnualCreditReport.com. If they don’t respond to your dispute within 30–45 days, then they’re legally obligated to remove the item in question.
2. Negotiate with NCO Financial Systems
Unfortunately, if the debt is legitimate and it’s less than 7 years old, removing NCO Financial Systems from your credit report will be very difficult (although not impossible).
Your best move at this point is to simply pay the debt. Newer credit scoring models ignore paid-off collection accounts, which means paying off your collection will boost your credit score even if you can’t remove the item.
However, when you pay, there are two negotiation strategies you can try as a last-ditch attempt to remove NCO Financial Systems from your credit report:
- Pay for delete: You might be able to convince NCO Financial Systems to remove the negative mark in exchange for paying off the debt. You can open these negotiations by sending them a pay-for-delete letter.
- Goodwill deletion: This is an alternate strategy you can try after paying your debt. Once the account is paid off, you can send NCO Financial Systems a goodwill letter asking them to empathize with your situation and remove the mark from your credit report as an act of kindness.
3. Wait 7 years for NCO Financial Systems to fall off of your credit report
Unfortunately, most collection accounts will stay on your credit report for 7 years after your first missed payment. Even if you pay off your debt to NCO Financial Systems, it will remain on your credit report.
Learn more about NCO Financial Systems’s impact on your credit score:
- How many points will my credit score increase after I pay off collections?
- How to rebuild your credit after having a debt sent to collections
How to deal with NCO Financial Systems harassment
Unless you tell them not to, NCO Financial Systems will keep contacting you until you pay off or settle your debt. However, there are restrictions on how they can go about doing this.
Restrictions on NCO Financial Systems
When attempting to collect payments from you, NCO Financial Systems must adhere to the regulations specified in the Fair Debt Collection Practices Act. This is a federal law that prevents debt collectors from engaging in harassment or predatory behavior, such as lying to you or calling you incessantly or at unreasonable hours.
NCO Financial Systems representatives also need to follow the rules set out in the Telephone Consumer Protection Act. It’s a good idea to familiarize yourself with these laws so that you can take action against NCO Financial Systems if they do something illegal.
Can I sue NCO Financial Systems for harassment?
Yes, you can sue NCO Financial Systems for harassment. If you can show that they’ve violated your rights under the Fair Debt Collection Practices Act, then you can collect $1,000 in statutory damages for each violation as well as payment for any damages that you’ve sustained as a result of their violation. NCO Financial Systems will also have to pay your attorney fees and court costs.
How to file a complaint against NCO Financial Systems
If a debt collector violates your rights under the Fair Debt Collection Practices Act or does something illegal, then you can report them to the Federal Trade Commission, the Consumer Financial Protection Bureau, or your state attorney general. From there, you’ll be able to find out whether you can also sue NCO Financial Systems.
Another option is filing a complaint on the Better Business Bureau (BBB) website, but this might not have the outcome you’re hoping for. Bear in mind that the BBB is actually a private organization that has no affiliation with the US government. They’ll forward your complaint to NCO Financial Systems, but there’s no guarantee that the agency will address it in a satisfactory manner. What’s more, if your dispute is sent to an arbitrator, then you may give up your right to take NCO Financial Systems to court.
Should you pay NCO Financial Systems?
You should only pay a collection agency like NCO Financial Systems if you’re certain the debt is yours and you owe it. If you’re struggling financially and can’t afford to pay this debt collector, you can get help from a non-profit credit counselor.