Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC, law enforcement partners bring 30 new actions against debt collectors, (Nov 5, 2015)

By Lisa M. Goolik, J.D.

In the first coordinated federal-state enforcement initiative of its kind, the FTC—along with federal, state, and local law enforcement authorities—announced 30 new law enforcement actions targeting deceptive and abusive debt collection practices. According to an FTC announcement, 115 actions have been taken so far this year by the more than 70 law enforcement partners in the Operation Collection Protection initiative.

“Being in debt is stressful enough for many Americans without also being subjected to intimidation and false threats,” FTC Chairwoman Edith Ramirez said. “Debtors have certain rights and rogue collectors that step outside the law will face the consequences of illegal behavior.”

Illinois Attorney General Lisa Madigan stated, “My office receives thousands of calls and complaints each year from consumers who are victims of illegal debt collection tactics. Through our partnership with the FTC and states across the country, we are putting scam operations out of business and protecting consumers from abusive practices by legitimate creditors.” Minnesota Commerce Commissioner Mike Rothman added that deceptive debt collection practices are “a nationwide problem that requires a nationwide response.”

As a part of the initiative, the FTC announced five new enforcement actions against debt collectors engaged in allegedly illegal practices. One remains under seal and the FTC cannot disclose the charges; however, two already have agreed to settle the charges.

K.I.P., LLC. Under a settlement with the FTC and the Illinois Attorney General, a married couple who ran a phantom debt collection scheme based in Aurora, Ill., have agreed to a $6.4 million judgment and a ban on working in any debt collection business. The settlement includes the proceeds from the sale of a car and the turnover of any assets held by third parties.

In April 2015, the FTC and the Illinois Attorney General charged K.I.P. LLC, and Charles and Chantelle Dickey, with threatening and intimidating consumers to pay payday loan debts they either did not owe, or did not owe to the defendants. According to the complaint, the defendants used a host of business names to target consumers who obtained or applied for payday or other short-term loans. Claiming those loans were delinquent, they threatened to garnish consumers’ wages, suspend or revoke their driver’s licenses, have them arrested or imprisoned, or sue those who did not pay.

National Check Registry. To settle charges brought by the FTC and the New York Attorney General’s Office, the operators of a debt collection scheme have agreed to a ban on participating in any debt collection business. The settlement order prohibits the defendants from misrepresenting material facts about any financial-related product or service, including lending, credit repair, debt relief, and mortgage assistance relief services, and profiting from customers’ personal information. One of the defendants, Joseph Bella, will pay $112,000 and surrender certain bank accounts, two cars, and two boats.

Companies: K.I.P., LLC; National Check Registry

News: ConsumerProtection FederalTradeCommissionNews IllinoisNews NewYorkNews