Court Orders Debt Collectors to Pay $11 Million to FTC

ScaleOn October 31, the United States District Court for the Western District of New York granted the Federal Trade Commission’s (FTC) motion for summary judgment against a group of debt collectors, finding that the debt collectors violated the Federal Trade Commission Act (FTCA) and Fair Debt Collection Practices Act (FDCPA).

The court found that, on numerous occasions, the debt collectors represented to consumers that they were affiliated with government entities (including law enforcement agencies), and told consumers that they were going to arrest, sue, or seize their wages, bank accounts, or property because the consumer had purportedly committed check fraud or some other crime.  The court noted that the consumers had not, in fact, committed such crimes, and that the debt collectors were not government agencies, nor did they have authority to take the threatened actions.  The court also found that the debt collectors improperly obtained information about consumers’ whereabouts and failed to provide them with statutorily-required information.

The court further found that one of the defendant companies held $92,000 in funds or assets that were traceable to funds obtained from consumers through the debt collectors’ deceptive and abusive acts.

The debt collectors were ordered to cease all debt collection activities.  The court also entered a judgment for $10,852,396 in favor of the FTC, as well as a separate $92,000 judgment against the debt collector with assets traceable to the deceptive and abusive acts.