At the request of the Federal Trade Commission, a U.S. district court has halted an operation that allegedly subjected consumers to abusive debt-collection practices and deceived the small-business clients for whom it collects.
The order also freezes the operation's assets and appoints a permanent receiver to run it while the FTC moves forward with the case.
As part of its continuing crackdown on scams that target consumers in financial distress, the FTC filed a complaint against six individuals and three companies involved in a Van Nuys, California-based debt-collection operation doing business as Rumson, Bolling & Associates.
The FTC complaint charges that the defendants, in collecting debts on behalf of their clients:
- harassed and abused consumers by threatening physical harm and death to them and their pets, threatened to desecrate the bodies of deceased relatives, and used obscene and profane language;
- improperly revealed consumers' debts to third parties, such as the consumers' employers, co-workers, neighbors, and family members;
- falsely threatened consumers with lawsuits, arrest, seizure of their assets, or wage garnishment; and
- falsely claimed that consumers would be liable for legal fees incurred in the collection of the debt.
According to the FTC complaint, using the slogan “no recovery, no fee,” the defendants promised small businesses and other potential clients that they would collect debts on contingency, charging a fee only when they successfully collected a debt.
But in many cases, the defendants allegedly collected money from consumers on a client’s behalf and then kept more than they were entitled to, sometimes keeping all the money for themselves, instead of forwarding what was owed to the client.
In some cases, the defendants asked clients for additional fees, purportedly for legal expenses in filing a lawsuit that would “guarantee” the successful collection of a debt. Many clients paid these fees, but the defendants failed to file the promised lawsuits and the clients never received any money in satisfaction of the debt in question.
The FTC charges that these practices violate the Federal Trade Commission Act and the Fair Debt Collection Practices Act.
Bill Ham (Fri, 30 Sep 2011 21:27:38 +0000): Its about time for this lawsuit, too bad that the fed refuses to take more action on these tytypes of abuses.
When I became disabled and unable to work, I had to deal with the CapitalOne goons in India. The auto-dialer would start calling me at 5am and would not stop until I answered. The knew but did not care that I had capone's credit card insurance that was going to pay the debt in full.
It is one thing to try to collect a valid debit, its entirely a different beast when the collector wilfully break the laws.
I would love to see more consumer friendly 'enforcable' laws to curb this abuse. It is a shame that the complaints to the ftc usually fall on deaf ears.
- but then again, its like most federal protection laws, useless. 
Joseph Riesenbeck (Sun, 02 Oct 2011 22:07:15 +0000): They should do more than this. There's a law firm out in California known as Nelson & Kennard. They are only a real legal firm by the fact that a couple of legal eagles own the company. They have been enabled when some lawyers got together and managed to get the legislature in California to pass a law making it legal for law firms to buy up debt. They don't defend anybody, they don't try anybody. What they do is buy debt from places like U.S. Bank, then with all legal means at their disposal, will improperly serve papers in order to sneak a default judgment through before an unwary consumer with no legal means at their disposal knows what hit them. In one case I know of, they even tried to add their own $2000 dollars in interest to the debt. They have been sued time and time again under the Fair Credit Act, yet they are able to stay in business by preying on those less fortunate. And no, I personally have had no dealings with this den of thieves and only began to look into it when a friend of mine ended up in a bad situation. And how did they serve his court papers? They dropped them on the sidewalk in front of his home. Yet, although this matter has been brought to the attention of two Attorney Generals, including Brown before he became governor again, I guess the campaign payoffs are too large for them to bother with it. But this is the kind of stuff a legislature will sneak through when no one is paying attention.
Jason Oswald (Mon, 03 Oct 2011 19:53:43 +0000): Extreme Debt Collector Abuse! The FTC "Finally" taking action, makes me wonder how many consumers were scared or manipulated into paying their debts by these goons. Consumers need to take these types of matters into their own hands! If anyone needs some immediate help, visit my website at www.thedebthelpguy.com - Get FREE Debt Help Tips!