FTC Reaches Settlement in Debt Collection Scheme

The Federal Trade Commission’s settlement bans the individuals and companies from operating their businesses after violating the FTC Act and FDCPA.

9/24/2018 1:00 PM

GovernmentNewsAdvocacy
FTC Reaches Settlement in Debt Collection Scheme

The Federal Trade Commission has reached a settlement with participants in an “illegal debt collection scheme,” outlined in two orders from the U.S. District Court for the Western District of New York.

“The operators of an illegal debt collection scheme have agreed to be permanently banned from the debt collection business in order to settle FTC charges that they falsely threatened to have people arrested if their debts were not paid,” according to a Sept. 21 news release.

Individuals and companies involved in the operation “falsely claimed consumers would spend up to 120 days in jail or pay thousands of dollars in bail,” if they did not pay alleged  debts, according to a news release from the FTC.

The district court’s orders entered against four defendants, including individuals and companies, include a $22.5 million judgment. A portion of the judgment is suspended due to two defendants’ inability to pay.

The complaint against the defendants also stated they did not provide information about their identities during calls with consumers or verification of the alleged debt within five days of the call, which is required by law, among other offenses, according to the FTC news release.

When there are admissible facts evidencing egregious conduct, ACA International supports law enforcement efforts to target bad actors, stop illegitimate debt collection activity, and safeguard consumer rights by removing known violators from the financial marketplace.  ACA has worked consistently with the FTC and other regulators to help them understand the complex issues that legitimate debt collectors face, and takes pride in its frequent and varied industry compliance educational services and offerings in support of the overwhelming majority of legitimate debt collectors who operate lawfully, take consumer protection seriously and play a unique and much-needed role in our credit-based economy.

ACA International continues to support industry and law enforcement efforts to target these bad actors and eradicate them from the consumer financial marketplace.  ACA has long led the effort to stop criminal debt collection activity and has worked consistently with the FTC and other regulators to help them understand the complex issues that legitimate debt collectors face.

It is critical that the FTC continue to prioritize egregious conduct and scam operations that cause the most harm to consumers, and differentiate those bad actors from the overwhelming majority of debt collectors who operate lawfully, take consumer protection seriously and play a unique and much-needed role in our credit-based economy.

ACA looks forward to working with the FTC and other government agencies to continue to rid the marketplace of bad actors who have no intention of complying with the law, causing substantial harm to consumers and legitimate debt collectors.

Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse. Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training website to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.

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