In March of this year the Federal Trade Commission (“FTC”) filed a formal complaint against collection
agency, Security Credit Services, LLC (“SCS”) and Jacob Law
Group PLLC (“Jacob”) alleging violations of the
Fair Debt Collection Practices Act (“FDCPA”) by charging
consumers illegal fees for payments made by telephone and for
threatening to file suit against consumers to get them to make
payment on debts. The complaint states that in conjunction
with SCS, Jacob contacted debtors and pressured them into making
payment over the phone, subjecting them to additional fees which
would not be incurred when making payment by mail or online.
Furthermore, SCS and Jacob falsely threatened to sue consumers who
did not agree to make the telephone payment and incur the
According to the FTC complaint, SCS and Jacob have worked
together since 2006 collecting debts. SCS purchased the debts
and then contracted with Jacob to contact debtors for collection on
its behalf. In its effort to collect debt, Jacob called on
consumers and pressured them to make payment by phone.
Together, these two collectors violated the law by
falsely threatening to sue consumers as a means of getting them
to pay. A debt collector is prohibited by law from using
false, deceptive, or misleading representations or tactics when
collecting a debt as stated under the FDCPA in section
1692e. The complaint went on to allege that Jacob told
the debtors they were required to pay an additional fee of $18.95
when making a payment over the phone, however failed to mention
this fee was waived when making a payment by mail or over the
internet. Using this tactic, SLS and Jacob collected close to
$800,000 since 2008 in fees from consumers.
In April both parties agreed to a settlement where the
collection agencies agreed to payback the almost $800,000 collected
from consumers in fees over the past several years.
Furthermore, SCS and Jacob are barred from making
misrepresentations in its collection efforts including
collecting additional fees and
threatening to file suit against consumers if it is not their
intention to do so.