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FTC Shuts Down 12 ‘Rogue’ Debt Collectors

blog.credit.com | November 10, 2015

By Bob Sullivan

Debt collectors allegedly told a consumer’s 84-year-old mother they had a warrant for her daughter’s arrest in one case. They told another she wouldn’t be able to see her children. A different collector allegedly kept harassing consumers over outstanding payday loans it had acquired, even after it was told by the seller the debts were invalid.

All the firms who allegedly took part in those practices are out of or temporarily banned from the debt collection business, the Federal Trade Commission said Wednesday. As part of its Operation Collection Protection, the agency announced a crackdown involving 30 new law enforcement actions by federal, state and local authorities.

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

One of the cases involves a KIP LLC, run by a married couple in Aurora, Ill. The FTC says Charles and Chantelle Dickey threatened and intimidated consumers to pay payday loan debts they either did not owe, or did not owe to the defendants.

“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,” the FTC said.

The couple agreed to a ban on working in debt collection and to a $6.4 million judgment. A number associated with KIP was not operational when called for comment.

“My office receives thousands of calls and complaints each year from consumers who are victims of illegal debt collection tactics,” said Illinois Attorney General Lisa Madigan. “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 also announced actions against:

California-based BAM Financial. The FTC says the firm “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’s operations have been halted by a temporary restraining order issued by a California federal court. An email request for comment went unanswered.

New York-based Delaware Solutions. The defendants “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,” the FTC alleges. The firm’s operations have been halted by a temporary restraining order issued by a New York federal court. A phone number listed for the firm was non-operational when called for comment.

New York-based National Check Registry. The firm “used lies and false threats to collect millions of dollars from consumers,” the FTC and New York attorney general’s office alleged. A settlement order bans the firm from misrepresenting material facts about any financial-related product or service. The firm’s owner, Joseph Bella, had previously settled related charges with the New York state attorney general in 2013. There was no answer at a phone number listed for National Check Registry.

Know Your Debt Collection Rights

When contacted by a debt collector, you may want to ask for written verification of the debt to get a better understanding of whether you are dealing with an unpaid balance you really do owe. You can learn more about what rights you have under the Fair Debt Collections Practices Act.

Remember, a legitimate collection account can do damage to your credit. You can monitor how one of these accounts is affecting you by pulling your free annual credit reports from AnnualCreditReport.com and getting your free credit scores each month on Credit.com. You can also dispute fraudulent collection accounts appearing on your credit report with the three major credit bureaus in an attempt to have them removed and your score restored.


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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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