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On April 30, 2025, the FTC filed an amended complaint and final order in the U.S. District Court for the Northern District of Georgia against a debt collection company in connection with allegations that the company engaged in deception and coercion to pressure consumers into paying debts they did not owe, in violation of the FTC Act, the Fair Debt Collection Practices Act (FDCPA), Regulation F, the Gramm-Leach-Bliley Act (GLBA), and the FTC's Impersonation Rule.
According to the complaint, the debt collector allegedly engaged in years-long campaign of intimidation and misrepresentation. The FTC's allegations include:
- False threats of arrest and legal action. The debt collection company allegedly informed consumers they faced imminent lawsuits, wage garnishment, or criminal charges unless they paid.
- Use of fictitious business names. The defendants allegedly used unregistered names such as "Total Consumer Solutions" to appear legitimate.
- Impersonation of lenders. The FTC claims the defendants falsely claimed to be affiliated with well-known payday lenders to lend credibility to the debts they were attempting to collect.
- Unlawful access to consumer information. The defendants allegedly obtained sensitive financial data, including bank account information, through fraudulent means in violation of the GLBA.
- Failure to provide required disclosures. The FTC alleges the debt collector failed to issue debt validation notices and did not identify itself as a debt collector, as required by the FDCPA and Regulation F.
- Improper third-party contact. The complaint also details instances where the defendants contacted consumers' family members and shared information about their supposed debts.
The stipulated order permanently bans the debt collection company from all debt collection and brokering activities and imposes prohibitions on impersonation, misrepresentations, and unauthorized acquisition of financial data. The judgement includes a $9.68 million monetary award to the receiver, which is suspended contingent upon turnover of assets, including bank funds, cryptocurrency, and personal property. The order also requires the defendants to destroy consumer data obtained during the course of the alleged scheme and imposes a 20-year compliance and recordkeeping obligation.
Putting It Into Practice: As the role of the CFPB remains somewhat unclear under the Trump administration, the FTC as well as state financial regulators continue to remain active and aggressive (previously discussed here and here). Companies engaged in debt collection should regularly evaluate their practices to ensure compliance with all applicable federal and state requirements.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
