The Federal Trade Commission announced this week three settlements with debt relief and debt collection businesses.
First, the FTC announced yesterday a settlement with the owners of a debt relief operation that targeted consumers with outstanding payday loans.The settlement bans the owners from the debt relief business.
In February 2015, the FTC filed a complaint alleging that Jared Irby, Richard Hughes, Coastal Acquisitions LLC, and PSC Administrative LLC, who typically did business as “Payday Support Center” or “Infinity Client Solutions,” falsely promised to resolve consumers’ payday loans through their hardship program. Once enrolled, consumers stopped making payments to their lenders, but the defendants failed to provide the promised debt relief, and consumers ended up in deeper financial trouble, having paid hundreds of dollars for no reduction or settlement of their loans according to the agency.
Under two stipulated final orders announced today, the defendants are banned from all debt relief-related activities, and they are prohibited from making misrepresentations about financial and other products and services, and from making unsubstantiated claims about any products or services. The orders also bar the defendants from profiting from consumers’ personal information and failing to dispose of it properly.
Each order also imposes a money judgment.
The full press release is here.
Second, the FTC banned two groups of debt collectors from the debt collection business. The FTC described the actions as part of Operation Collection Protection, an ongoing federal-state-local crackdown on collectors that use deceptive and abusive collection practices.
• In one of the two actions, against AFS Legal Services, the FTC found that the defendants called consumers and demanded payment of payday loan or other purported debt, even when consumers disputed the debt and the defendants failed to verify that money was owed. They also impersonated law enforcement, accused people of bank fraud, and falsely threatened to arrest or sue consumers if they did not pay. The stipulated order bans the defendants from debt collection activities and prohibits them from misrepresenting materials facts about any financial-related products or services, and from profiting from consumers’ personal information and failing to dispose of it properly. The final order impose a judgment of more than $4.4 million, which represents the amount of money consumers lost.
• In the other action, the FTC alleged that Unified Global Group LLC, ARM WNY LLC, Audubon Financial Bureau LLC and Domenico D’Angelo illegally threatened to arrest or sue consumers and harassed their friends, family members, and employers in an effort to collect debts. They also allegedly sent alarming and deceptive text messages to trick consumers into contacting them, without identifying themselves as debt collectors. The court subsequently halted the operation and froze the defendants’ assets pending litigation. Under the stipulated order, the defendants will be banned from debt collection activities and from debt brokering or otherwise trading in consumer information regarding debt. The order also prohibits them from profiting from consumers’ personal information and failing to dispose of it properly, and imposes a money judgment.
The FTC's full press release is here.