The U.S. government has shut down four debt collection agencies and a fifth company is still being investigated but not identified yet, the Federal Trade Commission said on Wednesday.
The companies’ protocol included abusive tactics, including threats of arrest, harassing phone calls, law suits and in some cases they pursued people who owed nothing. The group cited 115 actions this year alone.
The FTC said it was part of a coordinated effort by law enforcement to crack down on debt collection companies that used illegal tactics
At the request of the agency and other law enforcement, federal courts temporarily halted BAM Financial and Delaware Solutions from doing business, and National Check Registry agreed to shut down under pressure, the FTC said.
The owners of a fourth company, K.I.P. LLC, also shut down and agreed to pay a $6.4 million judgment. In some cases, this company pursued people and pushed them to pay “phantom debts” that they did not owe, the FTC said.
The FTC said in its release that there was a fifth case filed under seal that it could not discuss.
Since its inception, the Heritage Group has vigorously defended the rights of its Central Coast clients from abusive activities typical of debt collectors. Many have received cash awards in addition to credit restoration as a result of our hard work in conjunction with the law firm we use.
We hope that the discipline handed down by the FTC stems the tide of collection abuse and puts the rest of the collection companies on notice that such abuse will not be tolerated.