North Carolina Court Issues Temporary Restraining Order Against Debt Collector

Debt Collection

On August 29, 2017, the Federal Trade Commission (FTC) announced that a North Carolina Court entered a temporary restraining order against a debt collector, after the FTC filed a complaint and sought the restraining order.

The complaint alleges that the debt collectors attempted to collect debts from consumers that did not owe debts by claiming the consumers were delinquent on payday loans or other debts, and threatening them with arrest or legal action if they did not pay.  The FTC also alleged that the debt collectors called consumers repeatedly and used profanity, disclosed alleged debts to third parties, did not disclose they were debt collectors, and failed to provide legally required written notices.  The FTC claims that the debt collectors received more than $2.1 million from the scheme.  Based on these facts, the FTC seeks a permanent injunction and other equitable relied under section 13(b) of the Federal Trade Commission Act (FTC Act), 15 U.S.C. § 53(b), and Section 814(a) of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 (a).

The Court ruled, in entering the temporary restraining order, that the FTC was likely to prevail on the merits of its claims and there was “good cause to believe that immediate and irreparable harm will result” from the “ongoing violations.”  The Court also found that a “temporary restraining order with an asset freeze, appointment of a receiver, immediate access to business premises, expedited discovery as to the existence and location of assets and documents, and other equitable relief” was in the public interest, and ordered that relief entered.

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