Skip to main content

The 2011 science fiction movie “The Adjustment Bureau” dealt with a dystopian future (Is there any other kind in sci-fi movies?) where mysterious forces plot against individuals. But for many consumers, Regional Adjustment Bureau, a Memphis-based debt collector, made their day-to-day reality just as dystopic. An FTC lawsuit against the company – and a separate action against Credit Smart, LLC, headquartered in Suffolk County, New York – reminds businesses that when it comes to debt collection, the use of “fiction” (science or otherwise) can run afoul of the FTC Act and the Fair Debt Collection Practices Act.

Regional Adjustment Bureau makes between 10,000 and 15,000 calls every day in an attempt to collect on close to a million consumer accounts annually.  But according to the FTC, in many cases, even after consumers told the company they didn’t owe the debt – for example, that their name, Social Security number, or address was different from the person who actually owed the money – the defendant continued to hound them.

And the calls kept on coming over and over, day after day. Even when consumers asked the company to stop, the FTC says the harassment continued. In addition, collectors allegedly called people at work even though they knew or should have known it was inconvenient for people to get calls there or that their employer prohibited personal calls.

The complaint also charges that the company was loose-lipped about the existence of debts, illegally disclosing information to consumers’ relatives, neighbors, employers, and co-workers. Loose-lipped and relentless, repeatedly calling third parties, too. In addition, collectors allegedly left voicemail messages on general business lines or shared home lines, meaning that people other than the consumer who owed money could find out. Another favorite tactic: asking third parties to pass messages to the consumer on the debt collector’s behalf.

In some cases, even when the company got a consumer’s approval to withdraw a certain amount from their bank account, the FTC says Regional Adjustment Bureau helped themselves to more. (For industry members who track the statutes carefully – and we hope that includes you – the complaint alleges that was an unfair practice under the FTC Act and an “unfair or unconscionable means to collect a debt” under the FDCPA.)

To settle the case, Regional Adjustment Bureau will pay a $1.5 million civil penalty. The proposed order bans false, deceptive, unfair, and harassing debt collection practices, and includes provisions designed to squelch the conduct challenged in the complaint. For example, in the future, if a consumer disputes the validity or amount of a debt, Regional Adjustment Bureau has two choices: 1) close the account and stop collection efforts; or 2) suspend collection until it investigates and verifies that the information is accurate. In addition, the order restricts how the company can use voicemail to collect debts.

Also on the marquee of this debt collection double feature is a lawsuit against Credit Smart and affiliated companies and individuals. (After reading the allegations, we’ll leave it to you to decide how smart it is to violate the FTC Act and FDCPA.) The complaint challenges illegal conduct similar to the Regional Adjustment Bureau lawsuit – ignoring consumers’ pleas that they had the wrong person and contacting third parties illegally – and addresses a few novel collection methods, too.

According to the FTC, Credit Smart left taped messages for consumers, suggesting they call a number for information about a “Tax Season Relief Program,” a “stimulus relief package,” or a “balance transfer program.” In reality, it was just a trick to get people on the phone.

Credit Smart also threatened to sue consumers (which they had no intention of doing), to garnish their wages (which they can’t do without a court order), or to have them arrested (which they had no legal right to do). In addition, the FTC says the defendants threatened to collect on old debts that were beyond the statute of limitations, refused to give consumers information about the debts they supposedly owed, and falsely claimed they owed interest.

The Credit Smart order imposes a $1.2 million civil penalty, all but $490,000 of which will be suspended due to the defendants’ financial condition. The settlement bans false threats of lawsuit, arrest, or wage garnishment; requires that the defendants explain to people certain legal rights about time-barred debts; and mandates that debt collectors tell consumers how to complain to the FTC at or 877-FTC-HELP.  Also prohibited: any variation on Credit Smart’s fiction about offering financial relief or assistance.

Consult the FTC's debt collection page for compliance resources.


It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act authorizes this information collection for purposes of managing online comments. Comments and user names are part of the Federal Trade Commission’s (FTC) public records system, and user names also are part of the FTC’s computer user records system. We may routinely use these records as described in the FTC’s Privacy Act system notices. For more information on how the FTC handles information that we collect, please read our privacy policy.

The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.

  • We won’t post off-topic comments, repeated identical comments, or comments that include sales pitches or promotions.
  • We won’t post comments that include vulgar messages, personal attacks by name, or offensive terms that target specific people or groups.
  • We won’t post threats, defamatory statements, or suggestions or encouragement of illegal activity.
  • We won’t post comments that include personal information, like Social Security numbers, account numbers, home addresses, and email addresses. To file a detailed report about a scam, go to

We don't edit comments to remove objectionable content, so please ensure that your comment contains none of the above. The comments posted on this blog become part of the public domain. To protect your privacy and the privacy of other people, please do not include personal information. Opinions in comments that appear in this blog belong to the individuals who expressed them. They do not belong to or represent views of the Federal Trade Commission.

Get Business Blog updates