Federal Trade Commission Settlement Bans Company from Buying or Selling Debt
The operators of a Georgia-based debt collection business allegedly used fraudulent claims and threats to get people to pay debts.
Its methods included getting people to pay for debts they did not owe, or that the company had no authority to collect. As a result, the Federal Trade Commission banned the entity from the debt collection business and from buying or selling debt. The news comes amid a structured settlement with the FTC.
According to the FTC’s complaint, the defendants based their debt collection business model on falsely telling consumers they had committed a crime and threatening lawsuits. Further, they allegedly threatened to have the debtors’ wages garnished, along with threatening prison time if they did not pay the purported debts.
On numerous occasions, the FTC says the defendants collected on debts consumers had already paid, or that the defendants otherwise had no authority to collect. Additionally, the operation purportedly often illegally contacted consumers’ employers and other third parties, and failed to provide required legal written notices and disclaimers.
The settlement order prohibits the defendants from misrepresentations regarding any financial products and services. Additionally, it prevents the company from profiting from or failing to properly dispose of customers’ personal information collected as part of the illegal practices.