Federal Trade Commission Puts a Hurting on Several Shady Debt Collectors

It doesn’t get much lower than this: A debt collection representative called an 84 year old woman and notified her that they had a warrant for the woman’s daughter. Another mother was then told she would not be able to see her kids. Yet another collector is alleged to have constantly harassed consumers over outstanding loan debts that the collection agency had purchased, even after they were notified by the debt sellers that those same debts were no longer valid.

These collections firms that allegedly engaged in those illegal practices have found themselves banned from collecting debts, this according to the Federal Trade Commission recently. The agency launched something called Operation Collection Protection to crack down on shady debt collectors in conjunction with local, state and federal law enforcement authorities.

According to the Chairwoman for the FTC Edith Ramirez, “Being in debt is stressful enough for many Americans without also being subjected to intimidation and false threats. Debtors have certain rights and rogue collectors that step outside the law will face the consequences of illegal behavior.”

One case involved a collection agency called KIP LLC, which is run by an aurora couple. The FTC alleges that Chantelle and Charles Dickey used threats and intimidation tactics to get consumers to pay for payday advance loan debts that they either did not owe on or at least did not owe to the defendants in this case.

“They threatened to garnish consumers’ wages, suspend or revoke their driver’s licenses, have them arrested or imprisoned, or sue those who did not pay. Many consumers paid, even though they may not have owed the debts,” according to a release from the FTC. The couple agreed to be banned from doing debt collection work and to pay a 6.4 million judgement. Journalists attempted to reach the couple at a number that was provided, as the phone number was not operational at the time the call was made.

According to the Attorney General in Illinois Lisa Madigan, “My office receives thousands of calls and complaints each year from consumers who are victims of illegal debt collection tactics. 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.”

The FTC has also announced that they have taken action against a collector based in California called BAM Financial, saying that this company, “… extracted payments from consumers through intimidation, lies and other unlawful tactics … the defendants bought consumer debts and collected payment on their own behalf by threatening consumers with lawsuits, wage garnishment and arrest, and by impersonating attorneys or process servers.” BAM Financial’s operations have halted for the time being, due to a restraining order that was filed by the California federal court. Emails sent to get information from the company have not been answered.

An East Coast Operation, called Delaware Solutions has also had the FTC take action against them. This company is alleged to have, “… bought payday loans supposedly owed to a company that repeatedly told them to stop collection efforts because the debts were invalid, and ignored consumers’ evidence that they had never authorized a payday loan,” according to documentation from the FTC. The company has also had its operations halted by way of a restraining order. A phone number for this company was, like others, not operational when journalists called it.

Shady, threatening collections agencies are no laughing matter. It is nice to see some of these bad firms getting their comeuppance by way of the FTC.