On December 13, 2021, the Federal Trade Commission (FTC) announced that it reached a settlement with a group of South Carolina-based debt collection companies to resolve allegations that the companies violated the Federal Trade Commission Act (FTC Act) and the Fair Debt Collection Practices Act (FDCPA).
The FTC’s complaint, originally filed in July of 2020, alleges that the companies engaged in a scheme to collect over $12 million in payments for debts that either consumers did not actually owe or that the companies were not entitled to collect. Specifically, the FTC alleged that the companies used robocalls to leave deceptive messages claiming that consumers faced imminent legal action related to the unpaid debts. When consumers returned those calls, the companies allegedly coerced consumers into payment by falsely threatening legal action.
The settlement requires the debt collection companies to pay nearly $12.1 million—most of which will be suspended due to the companies’ ability to pay. The settlement also permanently bans the companies from future debt collection of any kind.
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