FTC Mails Checks to Victims of Debt Collection Scam

The Federal Trade Commission has announced that it is mailing nearly 600 checks worth a total of more than $184,000 to consumers who were targeted by a debt collection scam perpetrated by a group of defendants known as Delaware Solutions.

The FTC and the State of New York reportedly charged Delaware Solutions with improper debt collection practices in October 2015.

The FTC lawsuit alleges Delaware Solutions ignored evidence showing debts to be invalid, failed to identify itself as a debt collector, falsely identified themselves as attorneys or process servers, and threatened arrest or legal action if consumers failed to pay.

The Delaware Solutions defendants allegedly worked as third-party debt collectors that purchased past-due consumer debt and collected payments from consumers across the United States.

“Defendants have regularly threatened, pressured, and harassed consumers into paying debts the consumers do not owe,” the FTC alleged in the debt collection scam lawsuit. “Defendants have continued to collect on these fake debts even after the supposed creditor notified them that the debts were bogus. Even when Defendants have collected debts they reasonably believe are legitimate, they have done so using deception and harassment.”

The Delaware Solutions defendants allegedly threatened to take legal action against consumers without having the ability or intention to take such actions. The defendants also falsely threatened consumers that the “authorities” would come after them, that they would be arrested, that the debts are criminal matters and that they could be convicted of forgery and fraud.

The FTC charged the defendants with violations of the FTC Act and the Fair Debt Collection Practices Act. The State of New York charged them with violations of several New York state laws, including the state’s debt collection laws.

The FTC and State of New York sought injunctive relief, restitution, disgorgement, equitable relief and other penalties for Delaware Solutions’ allegedly illegal debt collection practices.

Delaware Solutions agreed to an order permanently banning them from the debt collection industry. A New York federal court entered the order in August 2016.

According to the FTC, the average refund amount is $308.37.

If you receive a check, you should cash it within 60 days.

If you have questions about the debt collection scam refund program, you may call Analytics Consulting LLC, the FTC’s refund administrator, at 1-855-687-2018.

The debt collection scam lawsuit was filed by attorneys Jonathan E. Nuechterlein, Matthew J. Wilshire and Michael White of the FTC, Attorney General of the State of New York Eric Schneiderman and by Assistant Attorney General James M. Morrissey.

The FTC Delaware Solutions Debt Collection Scam Lawsuit is Federal Trade Commission, et al. v. Kelly S. Brace, et al., Case No. 1:15-cv-00875-RJA, in the U.S. District Court for the Western District of New York.

UPDATE: February 2019, the FTC mailed out a second round of checks totaling more than $37,000 to victims of Delaware Solutions. Those who receive both checks are getting 100 percent of their money back.