The Federal Trade Commission this week summarized its recent work on debt collection issues in a letter.
Over the past year, the FTC has brought or resolved seven debt collection cases affecting hundreds of thousands of consumers. This is the highest number brought or resolved in any single year.
In two cases that included civil penalties, the FTC obtained $2.8 million and $2.5 million, respectively, for West Asset Management Inc. (see story) and Asset Acceptance LLC (see story), the two largest civil penalty amounts the agency has ever obtained for alleged Fair Debt Collection Practices Act violations.
The FTC also filed actions against payday lenders American Credit Crunchers LLC for allegedly misrepresenting collection on payday loan debts that they in fact weren’t authorized to collect, or that consumers did not owe - and LoanPoint LLC and Payday Financial LLC for allegedly misrepresenting that they could lawfully garnish supposed debtors’ wages without obtaining a valid court order.
The FTC charged two other debt collectors with "especially egregious practices": Defendants in Forensic Case Management Service, Inc., doing business as Rumson, Bolling & Associates, allegedly threatened physical harm to consumers, desecration of their deceased family members, and killing of their pets to persuade consumers to pay (see story). They also allegedly retained more fees from their clients than they had agreed to take.
Defendants in Rincon Debt Management Services LLC targeted English- and Spanish-speaking consumers, impersonating process servers and other officials, and falsely threatening to sue and arrest those whom they claimed owed money, the FTC alleged (see story).
In outlining the FTC’s other debt collection enforcement efforts, the FTC noted its new policy statement addressing whom debt collectors can contact if an alleged debtor has died and what collectors can do in collecting on debts in these circumstances. The FTC also filed two “friend of the court” briefs in federal court.
The first amicus brief opposing a proposed class action settlement with debt buyer Midland Funding LLC argued that the settlement would require consumers to surrender important protections provided by the FDCPA in exchange for a minimal payment.
The FTC also joined the Solicitor General’s office in filing an amicus brief in Fein, Such, Kahn & Shepard PC advocating that the U.S. Supreme Court decline to hear an appeal from an appellate court decision addressing whether the FDCPA applies to collector communications with consumers’ attorneys.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Consumer Financial Protection Bureau is required to submit annual reports to Congress on the FDCPA, a task previously assigned to the FTC. The first CFPB report is due today. The FTC's letter summarizing its recent work on debt collection issues is intended to assist the CFPB in preparing its report.