Consumer Finance Insights
December 17, 2018

FTC Settles for Nearly $3.5 Million with Debt Collectors Over Alleged Debt Collection Scheme

​On September 7, 2018, the Federal Trade Commission (FTC) announced a settlement with a Georgia debt collection company and its principals over alleged illegal collection practices.

In October 2017, the FTC filed an action against the defendants alleging violations of the Federal Trade Commission Act (FTC Act), 15 U.S.C. §§ 45(a), 53(b), and the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692.  Specifically, the FTC alleged that the company and its principals had tricked consumers into believing they owed money on debts that they did not owe or that the company had no authority to collect.  According to the FTC, the defendants falsely claimed that consumers had committed a crime and would threaten arrest, legal action, or wage garnishment if consumers did not pay off their “debts.”  The FTC also alleged that the defendants would contact third parties, including the consumers’ employers, during collection attempts, and failed to provide statutorily-required notices and disclosures.

The U.S. District Court for the Northern District of Georgia entered orders against defendants (herehere, and here) each of which impose a judgment of $3,462,664 in equitable monetary relief for which the defendants are jointly and severally liable.  The orders ban defendants from engaging in debt collection activities or the buying and selling of debt or debt-related information, prohibit misrepresentations relating to financial-related or other products or services and from profiting from or improperly disposing of consumer information, and subject defendants to compliance monitoring.  The judgment was partially suspended based on the defendants’ financial state.  A default judgment was entered against four other defendants.

Enforcement Watch previously reported on this matter here.