The FTC and New York AG Eric Schneiderman have announced that they are joining forces, and have filed two joint complaints against two Buffalo-based debt collection companies that allegedly used threats and abusive language to collect more than $45 million from consumers nationwide. According the first complaint filed against Four Star Resolution, LLC, the FTC and New York AG’s office allege the debt collection company called regularly called consumers using fictitious addresses, bogus company names, and spoofed phone numbers in attempts to collect million of dollars in supposed debts. As part of the alleged scheme, Four Star operators falsely identified themselves to consumers, claiming they were attorneys, process servers, government agents, or law enforcement officials.
In some instances, the collectors claimed the consumers had committed an illegal or criminal act and subsequently threatened them with arrest, imprisonment, or lawsuits unless payment was made immediately. During one call cited in the complaint, a collector used the pseudonym “Detective Jeff Ramsey,” and left a message where he falsely claimed he was seeking to serve a bench warrant for the consumer related to check fraud, the FTC reports. When consumers asked collectors for proof of the supposed debt, representatives from the company refused to provide it, instead saying they would receive evidence in court.
According to the second complaint filed against Vantage Point Services, LLC, the company used deceptive, unfair and abusive tactics to pressure consumers into paying for purported debts. The complaint alleges that representatives for the company placed calls to consumers falsely claiming to be a law firm, process server, unrelated debt company or entity affiliated with the government.
In some cases, consumers reported that the callers claimed to be from the government – including FBI agents and district attorneys – or that they were working as an intermediary with the state. Collectors then claimed that consumers had committed a crime and would be arrested if they didn’t make a payment on the supposed debt. Similar to tactics used by Four Star, representatives for Vantage Point also refused to provide consumers with basic information about their purported debt as required by the Fair Debt Collection Practices Act (FDCPA).
In addition to deceiving consumers, the FTC and Schneiderman allege the companies often disclosed information about supposed debts to third parties, such as friends, family members and employers, or often times told family, friends and employers that the supposed debtor had committed a crime and would be arrested.
The FTC and New York Attorney General’s Office are seeking to permanently stop the collectors’ illegal conduct and provide refunds to affected consumers. According to AG Schneiderman:
Today’s action should make it clear that nobody is above the law, and when shady debt collectors engage in illegal and abusive business practices, they will be held accountable. The use of threats, including the threat of arrest, to collect debts is unconscionable, and I am pleased to partner with the FTC to stand up for consumers against these bad actors.
Debt relief companies have recently drawn the attention of the FTC more and more. In fact, just recently, the FTC filed a complaint against a payday loan debt relief company that induced consumers to sign up for its debt forgiveness program under the guise of reducing or eliminating the consumers’ debts.