CHARLESTON -- West Virginia Attorney General Darrell McGraw has announced a settlement with an Ohio-based collection agency.

McGraw's Consumer Protection Division filed a lawsuit against National Enterprise Systems last year, accusing the agency of using illegal and strong-arm tactics to collect debt from West Virginia consumers.

The abuse included telephone harassment, repeated calls to consumers who stated they did not owe debt and false threats of lawsuits, arrest and criminal prosecution, according to the suit.

McGraw claimed National Enterprise Systems added unlawful fees to accounts when it attempted to collect debts owed to many West Virginia colleges and universities. National Enterprise Systems argued that it simply had collected the amounts requested by each school and did not know if or when additional fees had been added.

The Agreed Final Order was approved by Kanawha Circuit Court and says National Enterprise Systems will pay $75,000 to the State of West Virginia. That money will be used for providing restitution to complainants as well as consumer protection and education.

The collection agency also agreed to comply with state and federal consumer protection laws and submit a comprehensive plan within 90 days outlining actions it will take to meet the terms of the order.

"Notwithstanding the alleged conduct that led to this lawsuit, I am satisfied that NES is committed to resolving our concerns and I commend the company for agreeing to this settlement," McGraw said in a statement. "It is my hope that the actions taken in this and similar cases will place the collection industry on notice that the rules of fair and ethical conduct will be strictly enforced in West Virginia."

Settlement funds will be used to reimburse students and consumers who paid unlawful fees to the collection agency for debts allegedly owed to West Virginia schools.

A claims process for reimbursement of unlawfully collected fees will be announced later this month.

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