FTC: Bill Collectors Posed as Cops to Threaten Arrest

July 30, 2014
Housing Wire 
debt settlement news
One in three Americans is delinquent on their bills, and many are targeted by collectors who employ excessive measures. The latest Consumer Financial Services Alert from law firm Ballard Spahr highlights some questionable tactics used by bill collectors in New York.

The attorney general of New York and the Federal Trade Commission have partnered to take down several companies that have colluded to violate the rights of distressed borrowers. The primary defendant is the National Check Registry, but other companies are named in concert.

“Weighing the equities and considering Plaintiffs' likelihood of ultimate success, a temporary restraining order with an asset freeze, appointment of a receiver, immediate access to business premises, expedited discovery as to the existence and location of assets and documents, and other equitable relief is in the public interest,” the complaint reads.

The defendants are suspected of pretending to be affiliated with government entities, including law-enforcement agencies, or pretending to act on behalf of an attorney. They also allegedly told consumers that nonpayment of the debt would lead to arrest, garnishment of wages, or confiscation of driver’s licenses. They allegedly threatened additional legal action if the debt remained unpaid and threatened to disclose the debt to employers. The defendants have been accused of collaborating to collect debts more effectively. Some of the debt collectors allegedly tried to collect debts that had been discharged already in bankruptcy proceedings.









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