On November 1, 2018, the Federal Trade Commission (“FTC”) and the New York Attorney General’s Office announced their lawsuit against a New York-based debt collection operation, which alleges that the debt collection entities tricked people into agreeing to pay more money than what they allegedly owed in violation of Section 13(b) of the Federal Trade Commission Act (FTC Act), 15 U.S.C. § 53(b), Section 814 of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692l, and New York state law.
The complaint alleges that the defendants’ employees often engaged in “overbiffing,” a practice by which they demanded more money than consumers allegedly owed, and in many cases, consumers agreed to pay the higher amount. The complaint also alleges that the defendants’ employees pretended to work for law enforcement agencies or claimed to work on behalf of attorneys, and threatened consumers with arrest or lawsuits if they did not make a payment on their alleged debt.
The complaint seeks a permanent injunction to prevent future violations, restitution, disgorgement, and civil penalties of $5,000 for each violation of New York General Business Law Article 22-A.