FTC Settles With Operators Of “Phantom” Debt Collection Scheme


The FTC recently announced a settlement with several operators of a group of debt collection businesses that caused consumers to pay non-existent “phantom debts” in violation of the FTCA and the FDCPA.

The allegations included that the defendants misled consumers by falsely claiming to be attorneys or affiliated with attorneys to pressure consumers into making payments on debts they did not owe, and threatened to take legal action against consumers if they did not pay.