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FTC sues debt collection company that harassed consumers

Some Florida consumers who have paid off debts may have been targeted by collectors who were charging them with debts they did not owe or that the collectors lacked authority to collect. On Aug. 24, a federal judge placed a temporary restraining order on a North Carolina debt collection company that is being sued by the U.S. Federal Trade Commission. The FTC says the company used deceptive practice and intimidation to collect debts that either were not owed by the people they collected them from or that they did not have the right to collect.

According to the FTC, the company used names that sounded like law firms. They did not tell consumers they were debt collectors, and they used profanity and threatened people with legal action or arrest. In all, consumers paid them over $2.1 million. Not everyone who paid up was tricked by their tactics. Some simply paid to get the company to stop the harassment.

So-called “phantom debt collectors” are a growing problem. On Aug. 25, the FTC said it had settled for $9.39 million with another company that used deceptive practices. However, that company is unable to pay, so the judgment has been suspended. The FTC says that people should be aware of their rights so they know when illegal tactics are being used against them.

Even creditor harassment that is for debts that a person legitimately owes and that is within legal bounds can be upsetting. If a person is unable to pay those debts, a Chapter 13 bankruptcy is one option, and filing for bankruptcy puts at least a temporary halt to collection activities.

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