Debt Collectors Get Slapped


What do you say about debt collectors who pay a whopping fine and get to stay in business?  The Federal Trade Commission (FTC) slapped a debt buyer and a debt collection law firm with an almost $800,00 fine for alleged deceptive practices. But, according to an agreement they can continue on as long as they don’t make misrepresentations, or false claims.

The FTC complaint says debt buyer Security Credit Services, LLC, bought debt owed by consumers nationwide. Jacob Law, the legal firm it has worked with since 2006, then called and pressured consumers to make immediate payments over the phone via electronic checks, or credit and debit payments

Fees add to the bill

Jacob Law allegedly told consumers they were required to pay an additional fee of $18.95 for this service, but routinely failed to mention that they could avoid the fee by mailing the payment or paying online.

The FTC also alleged that Jacob Law Group implied that it would file lawsuits to collect the debts even when it did not intend to do so.

 

 

a debt buyer and a debt collection law firm, both based in Mississippi – violated the FTC Act and the Fair Debt Collection Practices Act by deceptively charging consumers a fee for payments authorized by telephone.  According to the FTC, the defendants led consumers to believe that the fee was unavoidable when, in fact, those who paid by mail or online did not incur the fee.  The FTC also alleged that the companies violated the laws by falsely threatening to sue consumers as a means of getting them to pay.  A debt collector is prohibited by law from using false, deceptive, or misleading representations or tactics when collecting a debt.

Under the terms of the proposed settlement, the defendants will pay $799,958 in restitution for consumers.  The defendants also are barred from making any misrepresentations  when collecting a debt, including false claims that consumers must pay an extra fee when making payments on a debt or that they will be sued for not paying a debt.

AThe FTC also alleged that Jacob Law Group implied that it would file lawsuits to collect the debts even when it did not intend to do so.

 

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Barbara Nevins Taylor

As the winner of 22 Emmy Awards and a slew of journalism honors and awards, I created ConsumerMojo.com to give you the straight story about complicated stuff. Tell us what you want to know and we'll get you the answers.