Defendants in a debt collection operation agreed to settle Federal Trade Commission charges after allegedly misleading consumers into paying unnecessary fees and falsely threatening consumers with lawsuits.  

Debt buyer Security Credit Services LLC, and collection law firm Jacob Law Group PLLC have worked together since 2006 to collect debts nationwide, according to the FTC's complaint. The firms, both based in Mississippi, violated the FTC Act and the Fair Debt Collection Practices Act by deceptively charging consumers a fee for payments authorized by telephone.

Under the terms of the settlement, the defendants will pay $799,958 in restitution to consumers. The defendants are barred from making any misrepresentations when collecting a debt, including false claims that consumers must pay an extra fee when making payments on a debt or that they will be sued for not paying a debt.

According to the FTC, the defendants led consumers to believe that the fee was unavoidable when, in fact, those who paid by mail or online did not incur the fee.

The FTC also alleged that the companies violated the laws by falsely threatening to sue consumers as a means of getting them to pay. A debt collector is prohibited by law from using false, deceptive or misleading representations or tactics when collecting a debt.

Security Credit buys consumer debt accounts, and contracts with Jacob Law to collect on them.  The complaint alleges that Jacob Law called and pressured consumers to immediately make payments on their debts by authorizing electronic checks or credit or debit card payments by phone.  

Jacob Law allegedly told consumers they were required to pay an additional fee of $18.95 for this service, but routinely failed to mention that they could avoid the fee by mailing the payment or paying online. Since 2008, the defendants have collected at least $799,958 in fees from consumers.

The FTC also alleged that Jacob Law Group implied that it would file lawsuits to collect the debts even when it did not intend to do so.

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