In a coordinated effort in 2015 called Operation Collection Protection, the FTC and more than 70 law enforcement partners took 115 actions against deceptive and abusive debt collection practices. Some of the companies and individuals they landed on were real but bad actors, while others were out-and-out scammers. Illegal activities included harassing phone calls, bogus threats of arrest or lawsuit, and violations of other provisions of the Fair Debt Collection Practices Act. In many cases, consumers didn’t even owe the debts.
They weren’t the first enforcement actions regulators have taken against bad debt collectors and, unfortunately, not the last. In a new initiative called Operation Corrupt Collector, the FTC and more than 50 partner agencies announced nationwide enforcement and education efforts to protect consumers from illegal debt collection practices.
In announcing the initiative, Andrew Smith, the Director of the FTC’s Bureau of Consumer Protection, said, “At a time when many are under financial stress, our coordinated actions today show that we’re continuing the fight against collectors who threaten people and try to collect debts they don’t owe.”
One of the FTC’s cases was filed against National Landmark Logistics, which the FTC alleges took in more than $12 million through illegal practices. Consumers who responded to robocalls were told the defendants were with “Tristar Mediation, “Tristar Attorneys at Law,” or some other bogus company name. The collectors threatened them with legal action unless they made an immediate credit or debit card payment. Another company associated with this one took in $5.2 million and was also sued by the FTC.
In the FTC cases, the defendants made calls to collect debts they couldn’t legally collect or the victims didn’t owe. The partner agencies’ cases concerned abusive practices such as threatening arrest at the victim’s workplace, imprisonment, or suspension of his driver’s license.
If you get a collection call about a debt you don’t recognize, the FTC and BBB recommend you stay calm and follow these steps:
- Find out who’s calling. Get the name of the collector and the company, its address, and the phone number. The collector’s refusal to provide the information is a red flag it’s a scam.
- Get “validation” information about the debt. Within 5 days of first contacting you, debt collectors must “validate” or tell you the amount of the debt, the name of the current creditor, and how to get the name of the original creditor. A refusal to provide this information is another red flag.
- Don’t respond to threats. When scammers threaten to arrest you, suspend your driver’s license, or call your employer if you don’t pay immediately, hang up and report them to the FTC at ftc.gov/complaint.
- Do your own detective work. Check with the original creditor. Is the debt yours? Is it their collector calling you? Or did they sell your debt or hire a company to collect it?
- Dispute the debt. If you think you don’t owe part or all of the debt, dispute it with the collector by mail or online. Even if you got validation information.
Collecting a debt is never a pleasant experience for either party, but most collectors do it honestly and compassionately. If you get a call about a debt you legitimately owe, do your best to work out payment arrangements.
Randy Hutchinson is the president of the Better Business Bureau of the Mid-South. Reach the BBB at 800-222-8754.
This article originally appeared on Jackson Sun: FTC cracks down on corrupt debt collectors