FTC fines debt collector $2 million for FDCPA violations

FTC fines debt collector for FDCPA violationsOn April 24, 2017, the FTC issued a press release announcing that a federal court had ordered the president of Commercial Recovery System, Inc. (CRS) to pay a $2 million civil money penalty for violating the Fair Debt Collection Practices Act (FDCPA) by falsely threatening debtors.

In January 2015, the Department of Justice filed a lawsuit on behalf of the FTC, alleging that CRS’s collectors falsely told consumers that they would sue debtors, garnish their wages, levy their bank accounts, or seize their property unless their debts were paid. In reality, CRS lacked the authority and intent to take any such actions. According to the complaint, CRS also falsely claimed that they are lawyers or were calling on behalf of lawyers, or that they were judicial employees.


NetSpend to pay $53 million in settlement with FTC

NetSpend FTCLast week, the FTC announced that NetSpend, one of the nation’s largest providers of prepaid debit cards, had agreed to pay $53 million to settle allegations that it deceived consumers about their ability to access funds loaded onto their cards.

In November 2016, the FTC filed a lawsuit alleging that NetSpend engaged in misleading advertising practices in violation Section 5 of the FTC Act which prohibits unfair or deceptive acts or practices. The FTC’s complaint alleged that NetSpend made misrepresentations in marketing materials and on its website that led consumers to believe that the cards were “ready-to-use,” that they would have “immediate access” to funds loaded onto their cards, and that their money is “always available.” NetSpend also claimed that consumers are “guaranteed approval” for a card.


FTC settles with municipal debt collector for abusive collection practices

On March 24, 2017, the Federal Trade Commission (FTC) issued a press release announcing a consent order with American Municipal Services Corporation, a debt collection company accused of engaging in illegal collection tactics.

American Municipal Services Corporation is a debt collection firm that collects court fines, parking tickets, and debts for utility bills and other services on behalf of over 500 municipalities throughout various states.


FTC orders telemarketing scheme operators to pay $7.5 million in consumer redress

FTC telemarketing scheme settlement On March 13, 2017, the FTC issued a press release announcing that it reached a settlement with the operators of a telemarketing scheme that had allegedly harmed thousands of consumers across the country. According to the FTC, many of the consumers targeted by the scheme were elderly individuals or military veterans living on fixed income.

Under the terms of the stipulated final order, the defendants must pay approximately $7.5 million in consumer redress. The defendants are also prohibited from telemarketing, marketing investment opportunities, and selling or otherwise benefiting from consumers’ personal information.


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