Collection Agencies Banned from the Industry and Hit with a Hefty Fine

The Federal Trade
Commission
(“FTC”) was created Justice _scaleto aid consumers in preventing the occurrence
of fraudulent, deceptive, and unfair business practices.  Over
the last decade, the FTC has spent a considerable amount of time
policing the Debt Collection Industry.  In a recent opinion of
a long-running investigation, the FTC ordered collection agencies,
namely Rumson, Bolling & Associates (“Rumson”) to pay a
combined total of $1.1 million as punishment for its conduct which
violated most importantly, the Fair Debt Collection Practices Act
(“FDCPA”) as well as other state statutes and further, banned
Rumson from conducting business in the industry entirely. 

This group of collection agencies which were the target of the
FTC investigation were all based in California but their collection
efforts spanned the country.  The FTC complaint alleged that
the collection tactics of Rumson involved using abusive and profane
language to debtors, threatened debtors with physical violence and
improperly spoke with employers, co-workers, neighbors, friends and
family members regarding specific details of the debts allegedly
owed.  Furthermore, the collectors falsely threatened
litigation, arrest and garnishment and in at least one reported
claim, a collector threatened that it would dig up a buried body if
payment was not made for a delinquent funeral bill. 

Not only were the collectors violating the rights of debtors but
also their own clients.  The FTC found that upon obtaining the
money illegally from debtors, Rumson kept more than their rightful
amount and sometimes retained all of the money collected in lieu of
paying off the original creditors who in fact still owned the debt
and who the collectors were hired to collect on behalf of.  It
was also found that on several occasions Rumson asked their clients
for additional fees to cover the expense of filing lawsuits, which
guaranteed their clients recovery, however no such lawsuits were
ever filed and Rumson pocketed the extra
money.   

These actions practiced by Rumson violated both the Fair Debt
Collection Practices Act, barring deceptive, abusive and unfair
debt collection tactics
as well as the FTC Act, which more
broadly expands to policing deceptive and unfair commercial
practices in general.  With the economy in its current state,
now more than ever is the time to be aware of your rights under the
FDCPA and protect yourself from undeserved and illegal
action. 

SmithMarco, P.C. has been protecting
consumer rights since 2005.  If you feel you have been the
victim of unfair collection practices and your rights have been
violated under the FDCPA, contact us for
a free case
review
.