Telecheck-Washington, the Bethesda-based check guarantee company, has sold its interest in its collection agency arm which was the source of complaints and state investigations.
For more than a year, the consumer protection agencies of Montgomery and Prince Georges counties and the Maryland attorney general's office have investigated scores of complaints against Telecheck-Washington, which, allegedly grew from practices of the Collectron collection agency.
Collectron follows up on guaranteed checks which bounce. Some of the allegations were that bad-check writers were called on the job, called a multitude of times, neighbors were called and Collectron employes "used terms and references to their racial heritage and profanity," one county official said.
"We would like to remove Telecheck's name from that investigation," Telecheck's new president, Richard Sharp, said. "Collectron is not the problem. It's a problem within the industry today. There's increasing pressure from consumers and regulators in the industry."
Collectron, however, 'will still collect on some Telecheck items," Sharp said.
Telecheck-Washington divested itself of Collectron also because it would ease some technical legal problems, such as simplifying fair credit reporting, Sharp said. He added that the "collection business is not consistent with Telecheck's long-term goals" of automation.
Telecheck is a computerized check-verification service which enables retailers, banks and other firms to accept checks written by most customers without risk. E. Brannon Anderson, president of Collectron, bought Telecheck's interest in the collection agency in a private sale, Sharp said.