Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Debt collector agrees to ban from collection business, (Aug 24, 2016)

By Michael Menzhuber, J.D., LL.M.

Pursuant to a settlement agreement with the FTC and the Attorney General of the State of New York, Kelly S. Brace and the four companies that he owns will be banned from the debt collection business, the FTC announced today.

The stipulated final order resolves FTC and New York charges brought in 2015 that the defendants: (1) collected on fake payday loans that they knew that consumers did not really owe; and (2) used deceptive and abusive tactics, including false threats of lawsuits and arrests, to get them to pay.

In addition to banning Brace from the debt collection business, the final order also prohibits him from:

• misrepresenting material facts or making unsubstantiated claims about any good or service; and

• profiting from consumers’ personal information or failing to dispose of it properly.

The final order imposes a judgment of $18.4 million that will be partially suspended, based on an inability to pay, once the defendants surrender $151,893. It also imposes a $418,000 judgment against relief defendant Joelle J. Leclaire, Brace’s former spouse, that will be partially suspended upon her payment of $44,700. In each case, the full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

The U.S. District Court for the Western District of New York entered the orders on July 13, 2016, and on August 18, 2016, respectively.

News: ConsumerProtection FederalTradeCommissionNews