Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC sues to stop debt collector’s illegal threats, (Jan 21, 2015)

By Jody Coultas, J.D.

The FTC filed FTC Act and Fair Debt Collection Practices Act claims against a Texas-based debt collection operation for illegally threatening consumers with legal action or wage garnishment (United States of America v. Commercial Recovery Systems, Inc. January 20, 2015).

Commercial Recovery Systems, Inc. (CRS), which collects third-party debt, including credit card and auto loan debt, allegedly told consumers that unless they pay a debt CRS claimed they owed, a debt collection lawsuit would be filed against them. In some cases, consumers were told that case had already been filed.

In addition, the FTC alleged that when CRS called consumers to collect a debt, its representatives falsely claimed or implied that they were lawyers or were calling on behalf of a lawyer, or that they were judicial employees. CRS allegedly told consumers that they would garnish their wages, levy their bank accounts, or seize their property unless the debt was paid. CRS lacked the authority and intent to take any of the threatened actions.

The FTC is seeking an injunction to stop the allegedly illegal conduct and civil penalties.

News: ConsumerProtection FederalTradeCommissionNews