Joining Forces to Help Stop Illegal Debt Collection Practices

The credit and collection industry makes approximately one billion consumer contacts per year, and Ramirez noted that a “vast majority of those are perfectly legal”. They told another she wouldn’t be able to see her children.

Nov 4 The US government has shut down four debt collection companies that used abusive tactics, in a few cases to pursue people who owed nothing, the Federal Trade Commission said on Wednesday.

The cases announced today bring to 115 the total number of actions taken so far this year by the more than 70 law enforcement partners in the Operation Collection Protection initiative.

“Last year alone, consumers filed over 280,000 complaints with federal authorities related to debt collection”, Ramirez said.

“The lawful collection of debt plays an important role in our credit system, and there are many collection agencies operating legally”, she said.

In one case, the company told a consumer’s 84-year-old mother that it had a warrant for her daughter’s arrest.

In a few cases, companies intimidated consumers into making payments on “phantom debt” or “zombie debt”, debts they had already paid off or that they never owed.

Collectors at BAM Financial, which was accused of lying to and intimidating consumers, allegedly bought and tried to collect debt by posing as attorneys or process servers and telling people that they faced arrest or wage garnishment if they didn’t pay up. Around 30 million Americans have an account in collections.

Attorney General Matt Denn says the Department of Justice Fraud and Consumer Protection Division has received almost 300 complaints about debt collection in the past two years, almost half of which were described as being of a “harassing nature”. “Through our partnership with the FTC and states across the country, we are putting scam operations out of business and protecting consumers from abusive practices by legitimate creditors”.

In Washington D.C., FTC chairwoman Edith Ramirez announced 30 enforcement actions nationwide against debt collectors who use illegal tactics like harassing phone calls and false threats of court action. An email request for comment went unanswered.New York-based Delaware Solutions. The firm’s operations have been halted by a temporary restraining order issued by a New York federal court.

Illegal debt collection practices have surged in the wake of the 2008 economic crisis, according to Illinois Attorney General Lisa Madiga.

The settlement order prohibits the defendants from misrepresenting material facts about any financial-related product or service, including lending, credit fix, debt relief, and mortgage assistance relief services, and profiting from customers’ personal information. There was no answer at a phone number listed for National Check Registry. The illegal practices targeted by authorities also include the failure of a few collectors to give consumers legally required disclosures and notices, or to follow state and local licensing requirements. Koegel said he also has an open-door policy for credit and collection professionals to talk with him about industry developments, issues and ideas.