FTC Announces Two Enforcement Actions Against Collection Agencies

The FTC announced today that it has joined with the New York Attorney General in filing complaints against two debt collection operations in Buffalo, New York.  The complaints were filed February 9, 2015 and temporary restraining orders have been entered in both matters. 

In Federal Trade Commission v. 4 Star Resolution, C.A. No. 1:15-cv-00112-WMS (W.D.N.Y.), the FTC alleges that 4 Star Resolution and the related entities violated the FTC Act and the FDCPA by engaging in false and deceptive debt collection practices.  Particularly, the FTC alleges that the defendants’ core practice involves misrepresenting to consumers that they have committed bank fraud, check fraud or some other unlawful act related to the debts.  The complaint goes on to allege that the defendants then advise the consumers that they will suffer dire consequences (including arrest and imprisonment) unless they make immediate payment of the debt.  The complaints alleges that the defendants also fail to provide the FDCPA required notices and disclosures. The complaint seeks injunctive relief, an order freezing assets, immediate appointment of a receiver, disgorgement of monies paid by consumers, and civil penalties.  A temporary restraining order has been entered which, among other things: freezes assets and appoints a receiver, and requires a cease and desist of the practices in question.

In Federal Trade Commission v. Vantage Point Services, LLC, C.A. No. 1:15-cv-00006 (W.D.N.Y.), the FTC alleges that Vantage Point Services and the related entities violated the FTC Act  and the FDCPA by engaging in false and deceptive debt collection practices.  Particularly, the FTC alleges that the defendants: (a) made false representations regarding their identities, addresses and business purposes; (b) false or unsubstantiated threats of arrest and other dire consequences; (c) unlawful contacts to third parties, often including representations that the consumers committed a crime and will be arrested; (d) failing to make the required statutory disclosures; and (e) charging illegal processing fees. Similar to the 4 Star Complaint, the complaint seeks injunctive relief, an order freezing assets, immediate appointment of a receiver, disgorgement of monies paid by consumers, and civil penalties.  A temporary restraining order has been entered which, among other things: freezes assets and appoints a receiver, and requires a cease and desist of the practices in question.

 

The FTC press release can be found here: http://www.ftc.gov/news-events/press-releases/2015/02/ftc-new-york-attorney-general-crack-down-abusive-debt-collectors