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.

In issuing the $2 million civil penalty judgment, the court found that CRS and its president Timothy Ford participated in deceptive acts and practices in violation of the FTC Act and the FDCPA. The action was brought as part of the FTC’s Operation Collection Protection, an initiative launched in November 2015 to crack down on deceptive and abusive debt collection tactics.

CRS has been collecting consumer debts nationwide since 1994. The company collects third-party debt, including credit card and auto loan debt. In April 2016, Ford and CRS were banned from the debt collection business under a permanent injunction issued by a Texas court. CRS’s former vice president was also banned from the debt collection business under the terms of a September 2016 settlement with the FTC.

Tags: Debt Collection, FTC

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