For debt collectors
who resort to illegal tactics, it must feel like 110 in the shade because 115 law
enforcement actions announced this year by the FTC and local,
state, federal, and international partners – including 30 just-filed cases –
have turned up the heat on law violators. From Buffalo to San Diego and dozens
of jurisdictions in between, companies that flout debt collection standards are
feeling the burn.
Operation Collection
Protection sends the unmistakable message that law enforcers have locked arms
in the fight against debt collection gone bad. Coordinated actions by the FTC,
Department of Justice, CFPB, 47 state AGs, 17 state regulators, local
authorities, and one Canadian agency target a broad range of illegal conduct –
abusive collection calls, bogus threats of arrest or lawsuit, deceptive debt buying
practices, phantom debt scams, and violations of pretty much every provision of
the Fair Debt
Collection Practices Act.
The defendants, too,
represent the breadth of the industry. Some actions target egregious practices
by rogue individuals. Others in the hot seat include some of the biggest names
in the business whose illegal conduct affected thousands of consumers. Remedies
include asset freezes, injunctions, and millions in redress and civil
penalties.
What can companies
take from Operation Collection Protection?
1. Illegal debt
collection practices are sitting smack in the center of the FTC’s radar screen. New cases
filed by the FTC include actions against Delaware Solutions, BAM Financial, and
a third lawsuit still under seal. We also announced settlements in pending
actions against National Check Registry, LLC, and K.I.P., LLC. (We’ll dive into
the details of those cases in future posts, including more about our
partnerships with the New York AG inDelaware Solutions and the
Illinois AG in K.I.P.) Add it all up and since 2010, the FTC has
sued more than 250 debt collectors and secured judgments of almost $350
million. 86 companies and
individuals have found themselves 86ed from the industry –
outright banned from ever collecting debts again.
2. The stakes just got
higher: Violations can result in prison time. Illegal debt
collection practices don’t just risk the wrath of civil enforcers and
regulatory agencies. They can land collectors behind bars, too. As part of
Operation Collection Protection, 19 individuals face indictment, have pleaded
guilty, or have been convicted of criminal charges. One scammer was sentenced
to more than 17 years in prison for actions stemming from a phantom debt
collection operation that targeted Spanish-speaking consumers. A federal judge
in Miami handed down a 13-year sentence against a related defendant.
3. Enforcement partners
have created a united front against debt collection abuses. Why this historic
Operation Collection Protection partnership? In 2014, consumers filed more than
280,000 complaints with federal agencies related to debt collection, earning
the industry the unenviable chant of “We’re #1.” When law enforcers join
forces, we can work more effectively to help protect the 35% of Americans with
credit records who have past-due debts on their reports. And today is just the
beginning of this partnership.
4. Industry members have
a role to play, too. There’s another partner whose cooperation is key in rooting out
illegal practices and encouraging compliance. The FTC has reached out to
members of the debt collection industry to work collaboratively to stop
questionable practices before they start. Our Debt Collection
Dialogues in Buffalo and Dallas focused
on that topic and we’ll continue the conversation at our November 18th
Dialogue in Atlanta.
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