Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Operation Collection Protection sidelines two groups of debt collectors, (Sep 8, 2016)

By Greg Hammond, J.D.

Two groups of debt collectors have been permanently banned from engaging in debt collection activities. The operators of the alleged debt collection schemes settled charges that they violated the FTC Act by making false or unsubstantiated claims that consumers owed debts, as well as misrepresentations of arrest and other legal action if consumers did not pay (FTC v. National Payment Processing LLC, FTC File No. 152 3173, Case No. 1:15-cv-03811-AT; FTC v. Unified Global Group, LLC, FTC File No. 142 3140, Case No. 1:15-cv-00422-EAW-LGF).

AFS Legal Services. A group of entities and individuals doing business as AFS Legal Services have agreed to settle FTC charges that they operated a nationwide debt collection scheme to deceive consumers into paying purported debts through the use of threats of arrest, jail, and other legal action. The complaint asserted that the AFS entities disclosed consumers’ alleged debts to third parties, claimed that consumers committed crimes, and impersonated or falsely claimed to be investigators affiliated with law enforcement authorities.

Under the stipulated order, the AFS defendants agreed to be banned from participating in debt collection activities and from making misrepresentations concerning financial-related products or services. The order also imposes a $4.48 million judgment, which represents the consumer injury in this case.

Audubon Financial Bureau. The FTC also reached a settlement with a group of companies that operated as Audubon Financial Bureau, which allegedly used deception and threats to extract money from consumers for purported debts. The Commission alleged that, through the use of telephone calls, text messages, and email, the defendants falsely threatened consumers with "dire consequences," such as arrest, if consumers failed to make payments; unlawfully contacted consumers’ family members, employers, and other third parties; charged consumers impermissible fees; and denied consumers statutorily-required information about themselves and consumers’ purported debts.

The Audubon Financial Bureau entities are banned from participating in debt collection activities and from making misrepresentations regarding financial-related products or services. Although the stipulated order imposes a judgment of $27 million, the judgment will be suspended upon partial satisfaction.

Operation Collection Protection is an ongoing federal-state-local crackdown on collectors that use deceptive and abusive collection practices. To date, the Commission and its law enforcement partners have brought 148 actions under the operation, the FTC announced.

Attorneys: Robin L. Rock and Peter Lamberton for the Federal Trade Commission. Louis Cohan (Cohan Law Group, LLC) for National Client Services LLC. Eric Soehnlein (Lippes Mathias Wexler Friedman LLP) for Unified Global Group LLC.

Companies: National Client Services LLC; Unified Global Group LLC

News: ConsumerProtection FederalTradeCommissionNews