Skip to main content
Menu Icon
Close

InfoBytes Blog

Financial Services Law Insights and Observations

FTC settles with debt collection operators for alleged fraudulent collections

Federal Issues FTC Consumer Finance Debt Collection Enforcement FTC Act

Federal Issues

On September 7, the FTC announced a series of settlements with the operators of a Georgia-based debt collection business for allegedly violating the FTC Act by making false, or misleading claims and threats during debt collection. As previously covered by InfoBytes, in November 2017, the FTC filed a complaint alleging that the defendants threatened legal action, garnishment, and imprisonment if purported debts were not paid, and in other instances, attempted to collect debts after consumers provided proof that the debt was paid off. Each settlement order (available here, here, and here) imposes a $3.4 million penalty against the defendants, which, after surrendering certain assets, will be partially suspended due to the inability to pay. The settlement orders ban the defendants from the business of debt collection, and prohibit the defendants from (i) misrepresenting information related to financial products and services, and (ii) disclosing, using, or benefitting from the consumer information obtained through the course of the debt collection activities.