Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Debt collection agency owners barred from collection business, required to surrender $3.3 million in assets, (Apr 3, 2014)

By Edward L. Puzzo, J.D.

The two principal owners of a nationwide collection agency, Rincon Debt Management, are permanently barred from the debt collection business and are required to surrender $3.3 million in assets, as part of a consent judgment obtained by the FTC, the agency has announced (FTC v. Rincon Management Services, LLC; FTC File No. 1123142; Civil Action No. EDCV11-01623 VAP (SPx)).

The FTC’s complaint alleged that the defendants violated the FTC Act and the Fair Debt Collection Practices Act by posing as process servers seeking to deliver legal papers that purportedly related to a lawsuit, or as attorneys or employees of a law office, to demand that consumers pay non-existent “court costs” and “legal fees” in connection with debts that, in many instances, the consumers did not owe.

“These debt collectors focused on Spanish-speaking consumers and other people who were strapped for cash, and preyed on them by using abusive collection tactics in violation of federal law,” said FTC Bureau of Consumer Protection Director Jessica Rich.

The order imposes a $23 million judgment against the defendants, Jason R. Begley and Wayne W. Lunsford, which will be suspended due to their inability to pay, except for the $3 million in frozen funds held by the receiver and the personal assets both agreed to surrender.

Companies: Rincon Management Services, LLC

News: ConsumerProtection FederalTradeCommissionNews