The Federal Trade Commission (“FTC”) was created to 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.