NY Attorney General Goes After Debt Collection Abuse

The Federal Trade Commission and New York’s Attorney General announced joint complaints against two debt collection companies that allegedly used threats and abusive language to collect more than $45 million from consumers nationwide.

The FTC and AG’s office allege that 4 Star Resolution LLC regularly called consumers using fictitious addresses, bogus company names, and spoofed phone numbers in attempts to collect million of dollars in supposed debts. As part of the alleged scheme, 4 Star operators are accused of falsely identifying themselves to consumers, claiming they were attorneys, process servers, government agents, or law enforcement officials.

In some instances, the debt collectors allegedly told consumers they had committed an illegal act and subsequently threatened them with arrest, imprisonment, or lawsuits unless payment was made immediately. In addition to deceiving consumers, the FTC and Schneiderman allege the company often disclosed information about supposed debts to third parties, such as friends, family members and employers.

In the second complaint filed by regulators, Vantage Point Services LLC and related corporate and individual defendants allegedly used deceptive, unfair and abusive debt collection practices to pressure consumers into paying purported debts.

The complaint alleges that representatives of the company placed calls to consumers falsely claiming to be a law firm, process server, unrelated debt collections agency or entity affiliated with the government. In some cases, consumers reported that the callers claimed to be from the government – including FBI agents and district attorneys – or that they were working as an intermediary with the state. Collectors then claimed that consumers had committed a crime and would be arrested if they didn’t make a payment on the supposed debt.

Similar to tactics allegedly used by 4 Star, representatives for Vantage Point also are accused of refusing to provide consumers with basic information about their purported debt as required by the Fair Debt Collection Practices Act (FDCPA). Additionally, the company allegedly provided information about the debts to third parties, often telling family, friends and employers that the supposed debtor had committed a crime and would be arrested.

Both Vantage Point and 4 Star have been charged with violations of the FDCPA as well as the FTC Act and several New York state laws. The FTC and New York Attorney General’s Office are seeking to permanently stop the collectors’ allegedly illegal conduct and provide refunds to affected consumers.

What is the Fair Debt Collection Practices Act?

In 1977, in response to a growing problem with abusive debt collection practices, the federal government enacted the Fair Debt Collection Practices Act (FDCPA). The objective of the FDCPA was to eliminate debt collection abuse by penalizing businesses that violated the regulations. In addition to imposing requirements on debt collectors, the FDCPA prohibited a variety of abusive collection practices.

More importantly, the FDCPA laws gave aggrieved consumers a legal cause-of-action to seek damages in court. Under the FDCPA, if a collector is proven to have used illegal debt collection practices, a consumer need not prove actual damages in order to recover up to $1,000 in damages plus reasonable attorney fees.

Join a Free Unfair Debt Collection Class Action Lawsuit Investigation

If a lender or debt collector engaged in unfair debt collection practices, you may have a legal claim and could be owed compensation for violations of the Fair Debt Collection Practices Act (FDCPA).

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DISCLAIMER: Debt collection itself is not illegal. However, debt collection firms collecting on consumer debts must adhere to the FDCPA. Even though debt attorneys are investigating these companies, their debt collection practices may be legal.