Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC, New York AG halt supposedly “egregious” debt collection operations, (Feb 26, 2015)

By Greg Hammond, J.D.

The Federal Trade Commission and New York Attorney General Eric Schneiderman have jointly filed two complaints and have received temporary restraining orders halting two allegedly egregious and abusive debt collection operations in Buffalo, New York. The separate operations purportedly used false threats and abusive language to collect more than $45 million in supposed debts (FTC v. Vantage Point Services, LLC, File No. 142 3141, Case No. 1:15-cv-00006-WMS) and (FTC v. 4 Star Resolution LLC, File No. 122 3202, Case No. 1:15-cv-0112-WMS).

In their first complaint, the FTC and Attorney General Schneiderman allege that Vantage Point Services, LLC, along with other entities and individuals, operated as a common enterprise that used deceptive, unfair, and abusive tactics to pressure consumers into making payments on purported debts. Specifically, the enterprise was charged with: (1) making false representations regarding the defendants’ identities, addresses, and business purposes; (2) making false or unsubstantiated threats of arrest and other dire consequences; (3) unlawfully contacting putative debtors’ friends, family, and coworkers, often falsely claiming that the supposed debtor committed a crime and will be arrested; (4) failing to provide statutorily-required information to consumers; and (5) charging illegal processing fees. Since January 2012, the defendants allegedly bilked over $16 million from consumers.

Similarly, in a separate complaint, the FTC and New York Attorney General charged that 4 Star Resolution LLC and other entities and individuals engaged in a common enterprise that used deceptive and abusive tactics to pressure consumers into making payments on supposed debts. The defendants allegedly: misrepresented that consumers committed “bank fraud,” “check fraud,” or other unlawful acts concerning debts; falsely claimed that consumers would face dire consequences, such as arrest and imprisonment, unless the charges are resolved by making immediate payments over the phone; failed to provide consumers with basic, truthful information; and failed to provide consumers with statutorily-required disclosures and notices that would assist consumers in verifying and challenging alleged debts.

“The Federal Trade Commission is pleased to work with the New York State Attorney General to stop abusive debt collectors,” stated FTC Bureau of Consumer Protection, Jessica Rich. “The cases announced today will help protect consumers from debt collectors that disregard the law in an attempt to make a buck.”

“Today’s action should make it clear that nobody is above the law, and when shady debt collectors engage in illegal and abusive business practices, they will be held accountable,” Attorney General Schneiderman remarked. “The use of threats, including the threat of arrest, to collect debts is unconscionable, and I am pleased to partner with the FTC to stand up for consumers against these bad actors.”

Companies: Vantage Point Services, LLC; 4 Star Resolution LLC

News: ConsumerProtection FederalTradeCommissionNews NewYorkNews