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.
