Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC $9.7M stipulated judgment in lawsuit alleging impersonation by debt collector, (May 2, 2025)

By Patricia K. Ruiz, J.D.

The court previously granted a temporary restraining order with asset freeze and a preliminary injunction in the case.

Debt collection scheme operators have agreed to a proposed settlement of FTC allegations In an amended complaint alleging violations of the Federal Trade Commission Act (FTC Act), the Fair Debt Collection Practices Act (FDCPA), its associated Regulation F, and section 521 of the Gramm-Leach-Bliley Act (GLB Act), the agency announced. The settlement, filed in the U.S. District Court for the Northern District of Georgia, imposes a monetary judgment of $9,684,338, which will be suspended. The settlement also prohibits the defendants from participating in debt collection activities, from actions related to selling or buying consumer or commercial debt or any information regarding a consumer relating to a debt, and from making misrepresentations related to the collection of debt (FTC v. Global Circulation, Inc., No. 1:24-cv-04927-TRJ (N.D. Ga. Apr. 30, 2025)).

Allegations. The Commission’s complaint, which was filed in the federal district court in Atlanta, charges that Global Circulation, Inc. (GCI), and its owner Kenneth Redon, III, (defendants, collectively) contacted consumers under an assortment of fictitious company names, such as Total Mediation Solutions (TMS), Total Consumer Solutions (TCS), and Consumer Impact Recovery (CIR). The agency avers that the company’s collectors would call consumers out of the blue, then threaten them with arrest, wage garnishment, and lawsuits if they refused to pay a supposed debt. These debts, it says, either do not exist or are not debts that GCI can legally collect.

The FTC further alleges that the company’s calls to consumers could be incessant, with some consumers receiving multiple calls a day and voicemails saying to reply about an urgent legal matter. Consumers who answer those calls are told that unless they pay the bogus debts right then on that phone call using a credit or debit card, they will face legal peril, contends the Commission. In some instances, it adds, GCI has called consumers’ family members with similar threats of legal action. Those calls have continued even after the company made contact with the consumer from whom they were seeking to collect a bogus debt, the agency notes.

Moreover, the Commission contends, GCI’s representatives have regularly failed to identify themselves as debt collectors, as required by the FDCPA, and have often had—or claimed to have—sensitive personal information that they have used to convince consumers that the demands for money were legitimate. The complaint asserts that GCI’s deceptive statements and the urgency behind them has enabled the company to take in more than $7.6 million in bogus debt from thousands of consumers.

Temporary restraining order; preliminary injunction. In October 2024, the court granted the FTC’ motion for an ex parte temporary restraining order with asset freeze, appointment of a receiver, and other equitable relief. In November 2024, the court entered a preliminary injunction against the defendants.

Stipulated order. The FTC, the defendants, and the court-appointed receiver agreed to the entry of a stipulated order for permanent injunction and monetary judgment to resolve all matters in the dispute. The stipulated permanent injunction, if approved by the court, permanently restrains and enjoins the defendants from participating in debt collection activities and from advertising, marketing, promoting, offering for sale, selling, or buying any consumer or commercial debt or any information regarding a consumer relating to a debt. Further, the order prohibits the defendants from misrepresenting or assisting others in representing, directly or indirectly, expressly or by implication: (1) that any person has a legal obligation to pay the defendants or any other person; (2) that any person is an attorney or mediator or affiliated or associated with an attorney, law firm, mediator, or mediation firm; (3) the nature or terms of any refund, cancellation, exchange, or repurchase policy, including but not limited to the likelihood of a consumer obtaining a full or partial refund or the circumstances in which a full or partial refund will be provided to the consumer; and (4) any fact material to consumers concerning any good or service.

The proposed settlement would bar the defendants from making any false, fictitious, or fraudulent statement or representation to any person to obtain or attempt to obtain the information of a consumer, including but not limited to credit or debit card numbers, bank account numbers and routing numbers, and consumer credit reports; and violating the GLB Act. The defendants would be prohibited from misrepresenting or assisting others in misrepresenting that any person is affiliated with, endorsed, sponsored by, approved by, or otherwise connected to any other person or business and from violating the FTC’s Impersonation Rule.

The order also would enjoin the defendants from failing to provide sufficient customer information to enable the FTC to efficiently administer consumer redress, providing the information requested in writing by the FTC within 14 days. The order sets forth recordkeeping, reporting, and compliance monitoring requirements for the defendants.

The Case is No. 1:24-cv-04927-TRJ.

Judge: Johnson, T.

Attorneys: Gregory A. Ashe for the FTC.

Companies: Global Circulation, Inc.

News: ConsumerProtection FederalTradeCommissionNews GeorgiaNews