Texas-based Company Closed by U.S. District Court

Jun 24, 2014

A Texas-based company has been closed at the request of the Federal Trade Commission. In 2013, the U.S. district court shut down the debt collection company and froze its assets at the request of the FTC. A receiver was also appointed to take control of the business while the case was in litigation.

According to ACA International, “The owner of a Houston-based debt collection operation that the Federal Trade Commission charged used insults, lies, and false threats of imprisonment to collect on payday loans will surrender his assets, estimated to be worth $550,000, to pay restitution to consumers who were charged unauthorized fees.”

The company conducted business nationwide. It was mainly involved in collecting payday loans, but it also owned the debt and acted as third-party collector in some cases. As of right now, all defendants have been banned from debt collection, and the operation has been charged with multiple violations; these violations are from both the Fair Debt Collection Practices Act and the FTC Act.

According to ACA International, “The defendants were charged with making false threats that consumers would be arrested and jailed, and that their children would be taken into custody; falsely claiming to be attorneys or to work hand-in-hand with local sheriff’s offices; disclosing debts to consumers’ employers and military superiors; and collecting bogus late fees and attorneys’ fees, according to a complaint filed by the FTC.”

The FTC’s Bureau of Consumer Protection was very adamant that debt collectors who make false threats and harass customers are in violation of federal law. They will be held accountable. The settlement resolves FTC allegations against the guilty parties. To be specific, the company owners, managers, and corporate defendants.

The company owner is required to surrender his assets, which is an estimated $550,000. The additional amount of $1.4 million has been suspended due to the owner’s inability to pay. Likewise, on the claim that they are unable to pay, the judgment against company managers has also been suspended. However, the claims on their inability to pay will be looked into further. If it is discovered that the financial information provided to the FTC is false in any way, the amount of judgment decided upon will become due.

ACA International reports that “The monetary judgment will be used to pay restitution to consumers who were charged unauthorized late fees and attorneys’ fees, often in the hundreds of dollars.”

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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