A federal judge in New York has banned from the collection business a group of debt collectors who pretended to be affiliated with the government and ordered them to pay nearly $11 million, after granting the Federal Trade Commission’s (FTC) request for summary judgment. The case is Federal Trade Commission v. Federal Check Processing, Inc., et al. (Case No. 14-CV-122S, United States District Court, Western District of New York). A copy of the Judgment and Permanent Injunction can be found here.

The action is part of Operation Collection Protection, a continuing nationwide crackdown on collectors whose illegal tactics include harassing phone calls and false threats of lawsuits and arrest. (See our November 4, 2015 article about this coordinated federal-state enforcement initiative targeting deceptive and abusive debt collection practices.)

In February 2014, the FTC had charged Mark Briandi, William Moses and 13 companies collectively known as Federal Check Processing with pretending to be affiliated with the government, falsely accusing consumers of committing check fraud, and threatening to have them arrested or sued in violation of the FTC Act and Federal Debt Collection Procedures Act.

In March of 2014 the FTC obtained a Temporary  Restraining Order (TRO) with asset freeze, appointment of a receiver, and other equitable relief against Defendants Federal Check Processing, Inc., Federal Recoveries, LLC, Federal Processing, Inc., Federal Processing Services, Inc., United Check Processing, Inc., Central Check Processing, Inc., Central Processing Services, Inc., Nationwide Check Processing, Inc., American Check Procesing, Inc. (a/k/a American Check Processing, Inc.), State Check Processing, Inc., Check Processing, Inc., US Check Processing, Inc., Flowing Streams, F.S., Inc., Mark Briandi, and William Moses, and Relief Defendant Empowered Racing LLC. 

[Editor’s Note: A “Relief Defendant” is a party named in civil litigation who is not accused of wrongdoing. However, it is alleged that the relief defendant has received property or profited from activity of the other named Defendants to which the relief defendant has no legitimate claim.]

At that time, an FTC representative commented: “These debt collectors took deception to new lows. They bullied consumers, falsely accused them of crimes, and pretended to be government officials. Stopping their illegal activity is a real victory for consumers.”

In April 2016, U.S. Magistrate Judge Michael J. Roemer recommended that the court grant the FTC’s request for summary judgment on all counts, and that the defendants be banned from debt collection activities and making misrepresentations about financial products and services. Judge Roemer also recommended that the court impose a judgment of more than $10.8 million against the defendants, and a $92,000 judgment against Empowered Racing LLC, a relief defendant that profited from the scheme.

On August 12, 2016, U.S. District Court Judge William M. Skretny adopted the Magistrate Court’s report and recommendation and granted the FTC’s motion in its entirety. Judge Skretny issued the final judgment and order on October 13, 2016.

insideARM Perspective

insideARM has previously written about other Operation Collection Protection actions. We applaud efforts by the FTC and state enforcement agencies to eradicate unlawful and fraudulent activity from the ARM industry.  It is operations and activities like these that continue to be referenced as actions typical of ALL collection agencies, debt buyers and law firms. The reality is that these companies and individuals are not representatives of the ARM industry. They are thieves and criminals that use a collection agency as a disguise for their illicit activity.


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