The tables were turned and the bill came due for debt collectors who posed as government officials and harassed people they claimed owed money. A federal judge in the Western District of New York shut down a Buffalo-based debt collection operation at the Federal Trade Commission‘s (FTC) request.
Mark Briandi and William Moses and 13 interrelated companies allegedly falsely accused consumers of committing check fraud and threatened them with arrest. The FTC says they collected millions of dollars, sometime from people who owed nothing.
The defendants allegedly bought debts and collected debts owed to other companies, many of which originated with payday loans.
Since May 2010, the FTC says they used company names that suggested government affiliations. The companies included Federal Recoveries, LLC; Federal Check Processing, Inc.; Federal Processing Services, Inc.; Nationwide Check Processing; and State Check Processing, Inc. They told consumers if they didn’t pay, they’d be sued, arrested, sent to prison and would have their assets seized.
Many consumers had already paid their debts, or simply didn’t owe any money. Nevertheless, they claim they were repeatedly threatened.
In addition, the debt collectors didn’t stop with the people who may have owed money. They repeated the threats to consumers’ family members, friends, co-workers and employers, and revealed the consumers’ debts.
The FTC says the defendants routinely refused to provide information about the debt, as required by federal law, or to investigate the debt’s legitimacy, even after some consumers explained that they did not owe the debt, the debt had been paid in full, or the defendants did not have the authority to collect on the debt.
The court order freezes the operation’s assets, and appoints a temporary receiver to take over the defendants’ business pending a hearing on March 17th.
FTC Consumer Protection Director Jessica Rich said, “These debt collectors took deception to new lows. Stopping their illegal activity is a real victory for consumers.”