The FTC has been issuing warnings to industry members for years to stay miles away from phantom debt collection – the practice of pressuring people to pay debts they don’t owe. Don’t collect phantom debts. Don’t traffic behind the scenes in questionable portfolios. And definitely don’t buy or sell portfolios known to be bogus.
Blog Posts Tagged with Debt Collection
Once bitten, twice shy. That fundamental principle of human behavior is why reputable businesses that work hard to earn consumers’ confidence should support the FTC’s ongoing efforts to fight fraud. According to the FTC’s 2017 Consumer Sentinel Data Book, consumers reported losing a total of $905 million to fraud last year. That’s close to a billion bucks people won’t be able to spend on legitimate products and services from credible companies.
Military families face all the consumer protection issues other Americans face – and then some. Frequent moves and deployments can pose additional financial challenges for servicemembers. And some of these concerns continue even after they’ve settled into civilian life.
So you’ve received a Civil Investigative Demand (CID) from the Federal Trade Commission related to a consumer protection matter. Now what? We appreciate that it can be daunting for any company – especially a small business – and we want to be as transparent as possible about the process.
One Direction had a hit with a song called “18,” but the FTC’s recent law enforcement and policy initiatives suggest that the agency will continue to pursue many directions in its efforts to protect consumers in ‘18. (Sorry. We’re expecting a fresh shipment of pop culture references in January.) In case you missed them – and in no particular order – here are ten FTC consumer protection topics of note from 2017.
Should auld acquaintance be forgot and never brought to mind?
It’s illegal under fed’ral law to collect debts you’re not assigned.
Of course, phantom debt collection – the practice of pressuring people to pay “debts” they don’t owe – harms consumers. But as an FTC complaint demonstrates, when phantom debt collectors strike, they could affect your company, too. According to the FTC, a Florida-based outfit engaged in a scheme to defraud consumers through the collection of debts people didn’t actually owe or the company didn’t have the authority to collect.
Pork Chop Hill Road, Screaming Eagle Boulevard, Hell on Wheels Avenue, or my former home on Patton Drive. If those street names sound familiar, chances are you’re a servicemember, a veteran, or part of a military family. July is the Month of the Military Consumer and the FTC has resources to help keep members of the military fiscally fit and scam savvy – and a tip for businesses that do business with military consumers.
When something negative keeps reappearing, the old saying goes that it “turns up like a bad penny.” According to an FTC lawsuit against a North Carolina outfit, those “bad pennies” – in this case, phantom debts the FTC says people didn’t owe – cost consumers way more than pennies.
An FTC lawsuit has put the brakes on a debt collection operation that the agency says used deception to collect traffic tickets, court fines, and other municipal debts for more than 300 local governments in eight Southern and Midwestern states.
“Just like the white winged dove sings a song,” you can count on the BCP Business Blog to celebrate the “Edge of Seventeen” – 2017, of course – with a recap of in-case-you-missed-it developments from 2016. (Sorry, Stevie Nicks. That was a stretch.) In no particular order, here is our take on ten noteworthy consumer protection actions from the year gone by.
Before we start making New Year’s resolutions for 2017, let’s assess last year’s pledges. In announcing Operation Collection Protection, a coordinated federal-state-local initiative to take on illegal debt collection practices, we made two promises: 1) to continue our commitment in the courtroom, if necessary; and 2) to foster close working relationships with law enforcement partners across the country. Here’s what we have to report.
The military community makes many of the same consumer decisions as their civilian counterparts. We all need to manage our money – and avoid rip-offs. But servicemembers and their families also face unique challenges, like frequent relocations and deployment. When a permanent change of station is on the horizon, a military family needs to rent or buy a new place to live, manage money while on the move, and be vigilant about dealing with businesses in an unfamiliar locale. A servicemember’s regular paycheck from Uncle Sam can make them a target for scammers.
“Thank you for being a friend” – to consumers, that is. We admit it. We’re prone to break out in song a little too enthusiastically, but the recipient of the FTC Criminal Liaison Unit’s Prosecuting Attorney’s Award merits a chorus of congratulations.
The FTC’s lawsuit against AMG Services, Scott Tucker, and others challenged deceptive and unfair payday lending and debt collection practices that targeted cash-strapped consumers. The case has already resulted in an important ruling related to the scope of the FTC Act. But an order granting the FTC’s Motion for Summary Judgment includes a history-making provision: a $1.3 billion financial remedy – the largest ever in a litigated FTC case.
Innovative financial technology is changing the way consumers borrow, share, and spend money, offering the promise of increased convenience and access to financial services. The FTC is hosting a series of FinTech events to broadly explore the implications of this financial technology for consumers, building on the agency’s longstanding focus on technological innovation and extensive enforcement experience in the area of non-bank financial practices.
A certain famous chef is known for exclaiming “BAM!” when he wants to extract the most flavor from a recipe. The FTC’s case against an unrelated California company called BAM Financial alleges a far less savory form of extraction.
“Is it getting hot in here?” For companies that engage in illegal debt collection practices, the answer is a resounding yes. One reason is the unprecedented cooperative effort by federal and state law enforcers to turn up the heat on violators. There’s more to come, of course, but efforts like Operation Collection Protection prove that consumer protection agencies are stronger when we work together.
A complaint filed by the FTC and the Illinois Attorney General against an operation that used names like Stark Law, Stark Recovery, and Capital Harris Miller & Associates alleges a veritable smorgasbord of debt collection violations. But the Stark Law lawsuit includes an additional allegation that should send a stark warning to those in the debt buying business.
We get this question a lot: “Is it OK to use text messages or social media to collect debts?” Do you want the short answer or the more detailed one? The short answer is that the Fair Debt Collection Practices Act doesn’t prohibit collectors from using texts or social media. But – and this is a major caveat – recent FTC law enforcement actions suggest that using them can present particular compliance challenges. That’s the short answer. If you collect debts as part of your business, read on to find out more.