In May of last year insideARM reported on a $4 million Federal Trade Commission (FTC) settlement with Southern California Company Asset Capital and Management Group (ACMG) and its ownership and management, Thai Han, Jim Tran Phelps, Keith Hua, and James Novella. The settlement resolved a long-running case where the FTC alleged that the company and management team extorted payments from consumers using false and illegal threats.
Yesterday, 14 months after the settlement was reported, the FTC announced that it was mailing almost 95,000 checks totaling approximately $4 million to consumers who lost money to the debt collection operation.
As insideARM previously reported, the FTC said that ACMG, its ownership, and management team, had been hit with a total of $90.5 million in judgments to resolve the case. But the judgments were suspended once the four principals surrendered their assets and those assets were liquidated. The liquidated assets resulted in the approximately $4 million used to refund consumers.
The settlement also carries a lifetime collection ban for the individuals involved.
There are at least two things to take away from this story.
First, we should never forget that the FTC still exists. Even though the CFPB has taken much of its thunder, the FTC is still a force to be reckoned with.
Second, the allegations in this matter were particularly egregious. The FTC alleged the defendants used a sprawling network of intertwined companies and dozens of fictitious names to illegally extract payments from consumers for credit card debt that they had purchased from creditors. The FTC also charged that the defendants posed as process servers in calls to consumers and third parties, falsely threatened consumers with lawsuits, wage garnishment, seizure of their property, and arrest, and disclosed debts to consumers’ employers, colleagues, and family members. Finally, the FTC also alleged that the defendants violated the FDCPA by failing to tell consumers they were attempting to collect a debt, and failing to notify consumers of their right to dispute and obtain verification of their debt.
The amount of the penalties highlight the serious nature of the allegations.