FTC Sues Debt Collection Agency Over Legal Threats and Other Practices

  • Email
  • Print
  • Printing Articles

    1. Click here to print!
    2. ...or print directly from your browser by choosing File > Print... from the menu or by pressing [Ctrl + P]. Our printer-friendly stylesheet will make sure extraneous website stuff isn't printed.
    3. You're done!

    Close this message.

  • Comments
  • RSS

The Federal Trade Commission said Wednesday that on its behalf, the Justice Department filed a lawsuit in federal court against a Texas-based debt collection operation and its current and former principals for illegally threatening consumers with false claims that unless they pay a debt, they will face legal action or wage garnishment.

The FTC’s complaint charges Commercial Recovery Systems, Inc. (CRS), its president, Timothy Ford, and its former vice president, David Devany, with violating the FTC Act and the Fair Debt Collection Practices Act (FDCPA) by using deceptive methods to collect debts. CRS has been collecting consumer debts nationwide since 1994. The company collects third-party debt, including credit card and auto loan debt.

According to the complaint, since at least 2010, CRS’s debt collectors have deceptively told consumers that unless they pay a debt CRS claims they owe, a debt collection lawsuit will be filed against them. In some cases, consumers are told that such a case has already been filed and will lead to adverse consequences unless the debt is paid.

“When it comes to debt collection, people have rights,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “It’s illegal to harass people, or to make false threats about wage garnishment or lawsuits. Unfortunately, these unscrupulous debt collectors systematically lied to the people they called.”

In addition, the FTC alleges that in many cases, when CRS calls consumers to collect on a debt, its representatives falsely claim or imply that they are lawyers or are calling on behalf of a lawyer, or that they are judicial employees. The complaint alleges in other cases, CRS falsely tells consumers that they will garnish their wages, levy their bank accounts, or seize their property unless they pay the debt. In truth, CRS lacks the authority and intent to take any of these actions.

“The defendants in this case are alleged to have lied to consumers in violation of the law,” said DOJ’s Acting Assistant Attorney General for the Civil Division, Joyce R. Branda. “We will enforce these laws and stop those who would use deception to extract money from American consumers.”

In its lawsuit, the FTC is seeking an injunction to stop the allegedly illegal conduct and civil penalties.

  • Email
  • Print
  • Printing Articles

    1. Click here to print!
    2. ...or print directly from your browser by choosing File > Print... from the menu or by pressing [Ctrl + P]. Our printer-friendly stylesheet will make sure extraneous website stuff isn't printed.
    3. You're done!

    Close this message.

  • Comments
  • RSS

Posted in Collection Laws and Regulations, Debt Collection, FDCPA, Featured Post .

×
Subscribe to our email newsletters

Continuing the Discussion

We welcome and encourage readers to comment and engage in substantive exchanges over topics on insideARM.com. Users must always follow our Terms of Use. Also know that your comment will be deleted if you: use profanity, engage in any kind of hate speech, post an incoherent or irrelevant thought, make a point of targeting anyone, or do anything else we find unsavory. Your comment will be posted under your current Display Name, shown below. If you'd like to change your Display Name, you must update it on the My Profile page.

  • avatar Ameripay says:

    This complaint leaves more questions than answers. What’s the motivation to sue a former VP that’s been gone for two years?

    What responsibility does the FTC have to reach out to a company that has been in business since 1994 to try to obtain voluntary changes sooner than suing to obtain a bunch of money.

    These lawsuits seem to come in two flavors. The first has tons of facts, exhibits and a restraining order where the FTC is clearly trying to prevent consumer harm. The second is light on facts, throws in nuisance defendants and talks more about the money the FTC would like to collect than the conduct that led them to sue the company.

    I think many people are aware that CRS is an aggressive agency. Possibly too aggressive at times. But $16,000 a violation for something they didn’t need to enjoin CRS from continuing while the litigation plays out? Seems like a money grab.

    Doesn’t the FTC have any obligation to work with reputable tax paying businesses to redress problems outside of Court whenever possible? The claims over things like this or a multimillion dollar shakedown over convenience fees just don’t feel right, but it’s always possible the FTC did try to work this out and didn’t feel they could make sufficient progress. The complaint obviously doesn’t contain every fact of the case. Only time will tell.

  • avatar nancy-suddoth says:

    This company is now bothering me at least once a day and sometimes twice a day! I need their address to stop these harassing calls! They are now saying I took out 2 payday loans and didn’t even try to pay them back but they are sketchy about the dates and they are quoting the wrong bank and the wrong email account for me around those dates! The truth is I didn’t take out any payday loans! I did about 10 years ago, paid it back and have since worked hard on getting my credit back in good order. How are they getting information on me and how did they get my SS number? This is all freaking me out! They told me there is a warrent out for my arrest in my county and that I will have to pay the court fees. The Sheriff will be serving me soon. They have the right to contact me at work. Ha! I am on disability and haven’t worked in about 10 years! I wish they would call me at work and leave me alone at home lol! Seriously, this has to stop. Like I said, I consider this harassment and I want it to stop. I don’t need this in my life right now. I have just been diagnosed with another serious illness and it is taking up much of my time just starting new treatments and keeping a positive attitude about it. I don’t need the CRS bothering me with their stupid antics!

Leave a Reply