On September 16, the Federal Trade Commission (FTC) announced that it had entered a stipulated order with a debt collection services provider over allegations that the debt collector violated the Federal Trade Commission Act and Fair Debt Collection Practices Act by misrepresenting to payday loan recipients that they were delinquent on their debts, collected millions of dollars in balances that were either not owed by the borrower or were not applied to a borrower’s loan. The FTC had previously filed a complaint against the debt collector, which resulted in the U.S. District Court for the Eastern District of California issuing a temporary restraining order. The complaint also alleged that the debt collector’s agents represented that they were law enforcement agents and told borrowers that they would contact the borrower’s family and friends if payments were not received. The settlement permanently enjoins the debt collector from participating in debt collection activities, prohibits further misrepresentations, orders the debt collector to pay $4,318,637 in equitable monetary relief, assesses a $33,500 civil money penalty, orders the debt collector to transfer the assets frozen by the temporary restrianing order to the FTC, and requires periodic compliance monitoring.
Blog Enforcement Watch September 21, 2015