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.”