The Federal Trade Commission (FTC) has shut down and seized the assets of 13 firms that used threats and fake identities to try to collect debts. Call-center employees from collection companies in Amherst, Cheektowaga, Lockport, and Niagara Falls, N.Y., used phony but official-sounding names such as Federal Check Processing or American Check Processing, or posed as government officials. Callers allegedly threatened consumers with arrest, litigation, a visit from a process server or sheriff at their home or workplace, property seizure, or wage garnishment.
“Their conduct was very egregious,” said Chris Koegel, assistant director of the FTC’s Division of Financial Practices in Washington, D.C. “Unfortunately, it’s not unique to these companies. It’s kind of a plague in debt collection.”
The FTC's lawsuit claims the companies used “abusive, unfair and deceptive tactics” to force consumers to make payments on alleged debts. Court papers say the firms collected and processed millions of dollars over the last three years. Two individual defendants, Mark Briandi and William Moses, have been identified as principals in some of the companies. A temporary restraining order has been issued against the companies and will expire later this month.
The lawsuit included several firsthand accounts from consumers. One North Carolina woman detailed a confrontational encounter with a caller from Federal Check Processing over what she said was a fictitious $5,000 debt. A retired teacher in Alabama, meanwhile, said she received calls from U.S. Processing about her son, indicating that he had written a bad check on an old bank account and could go to jail unless it was repaid. Victims ranged in age and geography, but all said they felt threatened by the callers.