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FTC helps stop harassing phone calls from creditors

New Jersey readers may already be aware that last year, the Federal Trade Commission filed a lawsuit against a debt collection company believed to be using illegal practices to collect money from consumers. That suit not only helped to stop harassing phone calls from creditors at the company, but has now led to criminal charges being filed against 15 of the company's employees, including the two owners. So far, four of those employees have decided to enter guilty pleas to conspiracy charges.

According to the U.S. Attorney working the case, employees told unsuspecting consumers that they were with government agencies (some even posed as prosecutors) and threatened arrest, suspension of the victim's driver's license and civil lawsuits. Documents allegedly outlining the debts owed were emailed to consumers that turned out to be falsified. Employees were provided with scripts that were designed to frighten people into paying.

In some cases, more money was collected than was actually owed. Prosecutors and the FTC estimate that, through lies and intimidation, the company collected approximately $31 million. Further investigation revealed that at least some of the money was used for an owner's gambling debts and his wife's cosmetic surgery.

Many legitimate debt collections companies operate here in New Jersey and around the country. However, there are also companies that use illegal tactics in order to collect debts that may not even belong to a consumer. Many of the FTC investigations into a company's debt collection practices originate with consumers who are desperate to stop harassing phone calls from creditors. Just because an individual is struggling with financial issues, that does not give these companies free reign to use harassment and intimidation in an attempt to collect a debt.

Source: NBC News, "Debt Collectors Used Threats, Deception to Rake in $31M, Feds Charge", Tracy Connor, Oct. 27, 2015

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