On October 23, 2018, the Federal Trade Commission and New York Attorney General filed a lawsuit against multiple defendants for a debt collection scheme where the defendants tricked consumers into paying more money than they owed.

The complaint, filed in the Western District of New York, alleges that the defendants’ employees:

  • Did not reveal during initial calls with consumers that they were debt collectors; instead, the employees pretended to be law enforcement officers or process servers.
  • Made threats of arrest for committing a crime or litigation to consumers in order to get them to pay their debts;
  • Inflated the amount owed by the consumer up to thousands of dollars in order to coerce payments;and
  • Used profane language while peaking with consumers.

The defendants include multiple companies and one individual, who controls the operations of these debt collectors.

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insideARM Perspective

Practices such as those alleged in this complaint undermine the tireless efforts and reputation of legitimate debt collectors. Unfortunately, there are bad actors out there and everyone would agree they should be stopped.

However, it is also important to remember that there are many debt collectors that genuinely try to do the right thing. Many legitimate debt collection agencies and firms exist that treat consumers kindly and fairly. These legitimate companies devote a lot of effort and resources to ensure that they comply with the vast amount of laws and regulations that govern the industry, some of which are vague and outdated. Many of these companies give back to their community as seen by the many articles on insideARM about charitable works. These legitimate companies should continue their efforts and be encouraged when regulators stop bad actors that tarnish the good reputation they are trying to build.


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