FTC Shuts Down Debt Collectors Who Insulted, Threatened Consumers

FTC Shuts Down Debt Collectors Who Insulted, Threatened ConsumersA U.S. district court judge shut down a Houston-based debt collection operation that allegedly used insults, lies, and false threats to collect on payday loans –  practices that are illegal under consumer protection laws, said the Federal Trade Commission.
The FTC requested the shutdown of the debt collection outfit after filing a complaint against Goldman Schwartz, Inc., three affiliated companies, and three individuals who own or manage them.
The operation did business nationwide collecting debts for numerous payday loan companies, including Ace Cash Express, Advance America, Allied Cash Advance, Checkmate, First Cash Advance, and MoneyMart.
The operation went to extremes to collect debt, the U.S. agency said. Those alleged actions included using false threats of arrest and imprisonment; telling some consumers their minor children would be taken into government custody; disclosed debts to family members and military superiors; and falsely claiming to work in partnership with local sheriff’s offices.
The operation also collected bogus late fees and attorneys’ fees, the FTC complaint alleged.
In one case, a Virginia woman was told that she would be arrested and jailed for three years, and would lose her disability payments if she did not pay a $980 debt.
The complaint charges the defendants with multiple violations of the FTC Act and the Fair Debt Collection Practices Act.

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