Debt Collection Scheme Eyed Magazine Subscriptions: FTC

Consumer debtOperators of a debt collection scheme that allegedly sought payment for bogus magazine subscriptions have settled with the Federal Trade Commission.
The proposed settlement, filed by the Justice Department on behalf of the FTC, bars Luebke Baker and Associates, Inc., Kevin Luebke, and other defendants from representing that a consumer owes a debt “without having a reasonable basis to do so.”
They are also prohibited from making any other misrepresentations when collecting debts or selling goods and services.
The scheme operators, who handled collection of hundreds of thousands of accounts each year, violated the FTC Act, the Fair Debt Collection Practices Act, and the Telemarketing Sales Rule, according to the complaint.
Under the settlement, the debt collectors must provide consumers with disclosures about their rights under the Fair Debt Collection Practices Act.  The proposed order also requires them to inform their collection employees of their personal obligations under the Act.
The Luebke defendants allegedly collected on debts for magazine subscriptions even after the FTC had successfully sued the company that originally sold the magazine subscriptions for deceptive marketing.
The defendants were notified of a 2003 federal court order against Cross Media Marketing Corp. that placed special requirements on anyone attempting to collect payment for these magazine subscriptions.
The FTC alleged that the Luebke defendants ignored these requirements and repeatedly told consumers the debts were due and payable.
The defendants also marketed a credit repair CD titled “Credit Solutions,” allegedly collecting an up-front fee before providing any goods or services, in violation of the Telemarketing Sales Rule, which bans advance fees imposed by companies selling credit repair goods and services, according to the complaint.
The proposed settlement imposes monetary judgments totaling $3.1 million.
For consumer information about dealing with debt collectors, see Debt Collection FAQs:  A Guide for Consumers.

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