FTC Secures Settlement Banning Debt Collectors Over Misrepresentations

Debt Collection  •  FTC

​On December 6, the Federal Trade Commission (FTC) announced that it had entered into a settlement agreement with two affiliated debt collection companies and their operator, resulting in a permanent injunction being entered by the U.S. District Court for the Middle District of Florida.  The complaint alleged that the companies violated Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, and the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692–1692p, by engaging in deceptive, abusive, and unfair debt collection practices.  The FTC alleged that in the course of attempting to collect debts, the companies (1) misrepresented that they were law firms; (2) ​​​threatened consumers with prison time or arrest; and (3) pressured consumers into paying debts they did not owe.

​Under the terms of the order, the companies agreed to a ban on debt collection activities and to pay ​$702,059 in equitable monetary relief.

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