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Debt collectors allegedly told a consumer’s 84-year-old mother they had a warrant for her daughter’s arrest in one case. They told another she wouldn’t be able to see her children. A different collector allegedly kept harassing consumers over outstanding payday loans it had acquired, even after it was told by the seller the debts were invalid.
All the firms who allegedly took part in those practices are out of or temporarily banned from the debt collection business, the Federal Trade Commission said Wednesday. As part of its Operation Collection Protection, the agency announced a crackdown involving 30 new law enforcement actions by federal, state and local authorities.
“Being in debt is stressful enough for many Americans without also being subjected to intimidation and false threats,” FTC Chairwoman Edith Ramirez said in a prepared statement. “Debtors have certain rights and rogue collectors that step outside the law will face the consequences of illegal behavior.”
One of the cases involves a KIP LLC, run by a married couple in Aurora, Ill. The FTC says Charles and Chantelle Dickey threatened and intimidated consumers to pay payday loan debts they either did not owe, or did not owe to the defendants.
“They threatened to garnish consumers’ wages, suspend or revoke their driver’s licenses, have them arrested or imprisoned, or sue those who did not pay. Many consumers paid, even though they may not have owed the debts,” the FTC said.
The couple agreed to a ban on working in debt collection and to a $6.4 million judgment. A number associated with KIP was not operational when called for comment.
“My office receives thousands of calls and complaints each year from consumers who are victims of illegal debt collection tactics,” said Illinois Attorney General Lisa Madigan. “Through our partnership with the FTC and states across the country, we are putting scam operations out of business and protecting consumers from abusive practices by legitimate creditors.”
The FTC also announced actions against:
When contacted by a debt collector, you may want to ask for written verification of the debt to get a better understanding of whether you are dealing with an unpaid balance you really do owe. You can learn more about what rights you have under the Fair Debt Collections Practices Act in this Credit.com article.
Remember, a legitimate collection account can do damage to your credit. You can monitor how one of these accounts is affecting you by pulling your free annual credit reports from AnnualCreditReport.com and getting your free credit scores each month on Credit.com. You can also dispute fraudulent collection accounts appearing on your credit report with the three major credit bureaus in an attempt to have them removed and your score restored.
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