FTC Obtains Court Order Against Scammers Impersonating Legitimate Debt Collection Businesses

The defendants are subject to a financial judgment and injunction against practicing in the industry after using alleged illegal tactics to collect from consumers.

12/7/2017 11:00 AM

FTC Obtains Court Order Against Scammers Impersonating Legitimate Debt Collection Businesses

The Federal Trade Commission has banned three defendants who allegedly posed as lawyers for the purpose of attempting to collect debts consumers did not owe from operating in the debt collection industry.

The settlement resolves the FTC’s initial complaint against the defendants in July 2017 and represents the continued importance of enforcement actions against imposters of legitimate small businesses that can harm both consumers and lawful debt collection companies that work with consumers to resolve rightfully-owed debts.

The settlement order filed Dec. 5 in the United States District Court for the Middle District of Florida Orlando Division bans the defendants from “participating in debt collection activities, buying or selling consumer or commercial debt, and trading in consumer information related to a debt,” according to a news release from the FTC. “They are also prohibited from making misrepresentations about any product or service, profiting from consumers’ personal information obtained from any debt collection activities, and failing to dispose of consumers’ information properly.”

The order includes a $702,059 judgment suspended in part with the defendants’ surrender of assets, pending litigation for the violations fo the Federal Trade Commission Act and Fair Debt Collection Practices Act.

The defendants’ alleged unlawful conduct, including coercing some consumers into paying debts they did not owe and threatening consumers with lawsuits and jail time is in direct contrast to the compliant practices of legitimate debt collectors who only pursue debt that is actually owed and treat consumers with respect.

For that reason, ACA International continues to commend the FTC for using its enforcement authority to stop the egregious practices of fraudulent debt collection schemes that harm both consumers and the professional debt collection industry as a whole. In this case, by impersonating actual small businesses, the alleged scammers went even further by also causing tremendous harm to specific businesses.

Though scammers sometimes use the guise of debt collection to cloak their schemes, it is important to distinguish such intentionally unlawful activity with legitimate debt collection businesses who take their compliance obligations seriously.

The FTC voted 2-0 to approve the order and the defendants agreed to the Final Order for Permanent Injunction and Settlement of Claims.

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