FTC Refunds Money to Victims of Rincon Debt Management Scheme

The Federal Trade Commission has announced that it will be mailing more than $2.7 million in refund checks to 5,232 consumers who lost money through the allegedly abusive debt collection scheme perpetrated by Rincon Debt Management.

According to the FTC, the refund checks are worth an average of $525.

Consumers who lost money to Rincon Debt Management should keep an eye on their mailboxes as they may be receiving a check in the mail soon. If you receive a check, you should cash it within 60 days.

The FTC initially filed a complaint against Rincon Management Services and other companies in 2011 as part of its efforts to fight illegal debt collection practices.

According to the FTC lawsuit, Jason R. Begley and Wayne W. Lunsford, the principal owners of Rincon, made bogus threats against consumers, claiming that they could be arrested over debts they did not owe.

“These debt collectors focused on Spanish-speaking consumers and other people who were strapped for cash, and preyed on them by using abusive collection tactics in violation of federal law,” Jessica Rich, the Director of the FTC’s Bureau of Consumer Protection, said.

According to the FTC, the Rincon defendants posed as process servers seeking to deliver legal documents related to a lawsuit. The defendants reportedly called consumers as well as their employers, family, friends and neighbors.

The Rincon defendants also reportedly posed as attorneys or law office employees and demanded that consumers pay court costs and legal fees, even though no lawsuit had been filed against the consumers. In many cases, the consumers did not actually owe the debt that the Rincon defendants sought to collect, according to the FTC lawsuit.

The FTC lawsuit accused the defendants of violating the Federal Trade Commission Act and the Fair Debt Collection Practices Act. The Rincon defendants allegedly violated the FDCPA by improperly contacting third parties about consumers’ debts; misrepresenting material facts about the existence and/or amount of the debt, failing to disclose the name of the company they represented, failing to disclose during telephone calls that they were attempting to collect on a debt, and failing to notify consumers about their right to dispute the debt.

The Rincon defendants were reportedly unjustly enriched by more than $9 million since 2009, according to the FTC lawsuit.

In addition to providing refunds to consumers, the settlement permanently bans the principal owners of Rincon from the debt collection business.

If you have questions about the Rincon Debt Management refund, contact the refund administrator at 844-330-6742.

The FTC is represented by Willard K. Tom, Maricela Segura and Raymond E. McKown of the Federal Trade Commission.

The FTC Rincon Debt Management Scheme Lawsuit is Federal Trade Commission v. Rincon Management Services LLC, et al., Case No. 5:11-cv-01623-VAP-SP, in the U.S. District Court for the Central District of California.

UPDATE: In April 2018, the FTC is mailing a second round of Rincon refund checks worth more than $669,000.