Usually it’s the process server who uses a disguise — pretending to be a delivery man or repair person to catch someone off guard. But in a case filed against Rincon Debt Management and a related group of California-based outfits, the FTC says that debt collectors posed as process servers, attorneys, or law firm employees, calling people to falsely claim they’d been sued because they owed money.
Alleging violations of the Fair Debt Collection Practices Act and Section 5, the FTC’s complaint offers insights into the defendants’ MO. FDCPA makes it illegal for debt collectors to tell others about a person’s debt or to contact third parties except to get someone’s contact information. But according to the FTC, the defendants — targeting both English- and Spanish-speaking consumers — called people’s employers, family members, friends, or neighbors.
Claiming to be a process server with papers related to a lawsuit that had been filed, the debt collector left messages with a “case number” and often said that the person had to call back that day or they’d be served with papers to appear in court. The FTC also charged that in some cases, the defendants misrepresented that they were from the Sheriff’s Department and threatened the person with arrest if they didn’t call back promptly.
Just a one-time mix-up? Not likely, says the FTC. The complaint quotes the defendants’ own documents —including one called “New Hire Pointers” — advising:
- “ when first coming to an account it is always best to call the [place of employment] first . . .”
- “ contact relatives instead of the debtor on the initial phone call to create urgency. . .”
- “ when doing a standard talk off and the person on the phone is prying . . . it is best to say you are a process server and due to federal privacy act you are not given that information.”
But what if the employer or family member wasn’t cooperative? The defendants didn’t miss a trick. According to the FTC, the defendants gave their collectors “rebuttal answers” designed to convince the third party that the friend or relative was in serious legal trouble. For example, what if the person at work responded, “We don’t pass information to the employees.” The defendants offered two possible rejoinders:
“A. Look I am trying to help your company. This matter is serious and will cause problems at the job. Grab a pen and get this redirected to the employees home.”
“B. Still no — (strongly ask) What is your name and your position in the company? We will document for the record that you made the decision for the [debtor] to be served as his place of employment.”
What happened when people called back? According to the FTC, the defendants claimed to be with the law office handling the “lawsuit” or even said they were attorneys themselves. After representing that legal action had been taken or was impending, the debt collectors allegedly told people they could “settle” for an immediate payment of the entire debt or through a payment plan — plus “court costs” and “legal fees,” of course.
And if that weren’t bad enough, in many instances, the FTC says that people didn’t even owe the debts the defendants were trying to collect.
A federal judge in California has entered an order stopping the illegal conduct, freezing the operation’s assets, and appointing a temporary receiver to take over the business while the FTC moves forward with the case.