Federal Trade Commision Shuts Down a Texas Based Collection Agency

Earlier this year, after launching an investigation into the
Texas-based collection agency Goldman Schwartz, Inc., the Federal
Trade Commission (“FTC”) makes the decision to file suit against
the collector for violations of the Fair Debt Collection Practices
Act (“FDCPA”).  The Texas U.S. District Court ordered the
agency to close its doors after
allegations of harassment
, lies and threats were made against
consumers to collect debts owed for payday loans.  The
collection agency collected debts for Ace Cash Express, Advance
America, Allied Cash Advance, Checkmate, First Cash Advance and
MoneyMart.  The court also froze all of Goldman Schwartz’s
assets and banned them from engaging in any collection activity
while the FTC moves forward with its case.

The FTC alleges that collectors working on behalf of the agency,
falsely threatened arrest and imprisonment and even went so far as
to tell consumers that failure to make payment would result in
their children being taken into government custody.  A report
to the FTC stated the agency went so far as to tell a Virginia
woman that she would be arrested, sentenced to jail for three years
and would lose her disability payments for failure to make payment
on a $980 debt.  In addition to threatening its debtors,
collectors disclosed
information regarding debts
to consumers’ family members and
fellow military officers.  The agency allegedly represented
itself to consumers as a law firm capable of filing suit or
inferred it was affiliated with the local sheriff’s office and
collected late fees and attorneys’ fees it was not entitled to

The complaint specifically charged Goldman Schwartz with
violations of the FDCPA including:

  • claiming that consumers committed crimes by not paying their
    debts resulting in arrest or imprisonment;
  • claiming to work in conjunction with law enforcement
  • claiming Goldman Schwartz is a law firm and not disclosing it
    is actually a collection agency;
  • using harassing, obscene or profane language, placing repeated
    and continuous calls to consumers with the intent to harass
  • calling at hours before 8:00 a.m. and after 9:00 p.m.;
  • adding unauthorized late fees and
    attorney’s fees
    to the amount consumers allegedly owed;
  • not disclosing a consumers’ right to
    dispute a debt
    and to
    request validation

If you believe you have been the victim of an abusive debt
collector or have any questions regarding debt collection
contact SmithMarco P.C. for a free
case review