Horrifying Tales From the FTC Vault
Most Egregious Violations in
FDCPA History
The Federal Debt Collections Practices Act (FDCPA) has safeguarded consumers from deplorable debt collection practices for more than 45 years.
The vast majority of collectors willingly comply with FDCPA regulations against abusive tactics. Among those who don’t comply, the most appalling violations read like a Stephen King novel.
In the spirit of Halloween, we share with you some genuinely horrifying tales from the Federal Trade Commission (FTC) archives.
"We're Coming to Get You – and Your Little Dog, Too!"
In 2013, the FTC shut down Texas-based collection agency Goldman Schwartz after its collectors threatened consumers with imprisonment and government custody of their minor children. The firm also was charged with contacting a woman's coworkers, claiming they would be required to pick her out of a lineup after she was arrested for failure to resolve her payday loan debt.
Our Compliance
Commitment
Here are the various ways CBSI is committed to regulatory compliance:
- Our collectors are highly trained according to FDCPA, HIPAA, and CFPB guidelines to comply with all state and federal regulations.
- Our compliance officer continually reviews all CBSI processes.
- Our custom-made compliance management system responds proactively to the continually changing regulatory environment.
- We extensively document our policies, procedures, and all consumer interactions.
- We stay current on all regulations governing our business activities.
The district court permanently banned Goldman Schwartz from any future collection activity. (Here’s a list of all FTC-banned debt collectors.)
That same year, the FTC successfully sued California-based Rumson, Bolling & Associates for escalating consumer harassment to a whole new level.
One plaintiff in that case testified that the agency’s collectors threatened to arrest, shoot, and then eat her dog before dispatching police to take her into custody.
But wait – it gets worse.
Deepening Horrors
Rumson, Bolling & Associates collectors also allegedly terrorized consumers who owed family funeral bills in the most egregious way imaginable: By threatening to exhume the bodies of deceased relatives and hang them from a tree or drop them outside the debtor’s door.
According to the FTC case file, these collectors also shouted profanities and allegedly terrified consumers with their final ultimatum: “Are you going to pay this bill right now ... or am I going to have to kill you?"
[The defendant's attorney claimed that the company's owners did their best to ensure regulatory compliance and that any wrongdoing was against company policy.]
When all was said and done, the district court halted operations at Rumson, Bolling & Associates, froze the agency’s assets, ordered them to pay a $700,000 fine, and permanently banned the firm from the collections industry.
The Phantom (Debt) Strikes Again!
A 2018 FTC case involved a Charlotte, N.C., collection operation known as Lombardo, Daniels & Moss (LDM). LDM collectors routinely impersonated lawyers in an attempt to recover phantom debts from unsuspecting consumers.
The imposters threatened consumers with lawsuits and jail time unless they paid immediately by credit or debit card over the phone – for debts they did not owe. Once again, the district court ruled that the defendants be permanently banned from future debt collection activity.
In 2021, the FTC charged an Atlanta-based firm, Critical Resolution Mediation, with impersonating police officers, attorneys, mediators, and process servers, in an attempt to collect on phantom debt. The bogus collectors routinely threatened consumers with imprisonment if they failed to pay.
In addition to banning the defendants from the debt collection industry, the court also ordered that they be prohibited from making any misleading claims while selling any product or service.
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Never on Our Watch!
At CBSI, we are every bit as horrified as you are by such appalling violations, and we applaud the FTC’s prosecution of these bad actors. As recent recipients of the Better Business Bureau Torch Award for Ethics, we work hard to ensure our reputation with consumers remains above reproach.
You never have to worry about consumer harassment when CBSI has got your back.
Sources:
Featured Image: Adobe, License Granted
Federal Trade Commission
CNN
The New York Times
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