The Fair Debt Collection Practices Act lays out some pretty clear dos and don’ts for debt collectors. Do identify yourself as a debt collector. Do follow up within five days of your initial communication with a written notice setting out the amount of the debt, the creditor's name, and details about how consumers can proceed if they dispute the debt. Now for some don’ts: Don’t imply a government affiliation. Don’t accuse people of a crime or threaten them with arrest. And don’t tell them that the Sheriff will be showing up at their home or place of business. But according to a lawsuit filed by the FTC against United Check Processing, Inc., 12 related corporate defendants, and corporate officers Mark Briandi and William Moses, the defendants didn’t do the dos and did do the don’ts, in violation of the FDCPA and Section 5 of the FTC Act.
The complaint charges that the defendants – primarily based in the Buffalo area – used deceptive, unfair, and abusive tactics to pressure people into paying debts, many of which the consumers had disputed in whole or in part. The lawsuit alleges that the defendants said they’d have people arrested for non-payment or prosecuted for check fraud if they didn’t pony up. According to the FTC, the defendants attempted to bolster the credibility of their threats by using company names with words like “Federal” or “U.S.”
Faced with defendants’ browbeating, many consumers cried uncle and paid them just to stop the harassment. Others who checked with the purported creditor found out they didn’t owe the debt, had already paid it, or that the defendants didn’t have authority to collect on it. Still others explained that they had challenged the debt, but the FTC says the defendants were undeterred. They continued the collection siege without taking independent steps to verify the accuracy of the account information.
The complaint cites a host of other alleged violations, including illegally communicating with family, friends, coworkers, and employers about a consumer’s purported debt; failing to provide the required validation notice; falsely claiming they had filed or intended to file a lawsuit against the consumer; and falsely claiming they would have their wages garnished, property seized, and bank accounts levied.
The lawsuit was filed in federal court in New York. While the case is pending, consider whether it’s time for a compliance check-up for your own debt collection practices. Refer to resources on the Business Center’s Debt Collection page.