Collectors Sued Over Collecting Non-Existent Debts

The Federal Trade Commission has sued several debt collection companies over collecting non-existent debts:

The agency ordered a federal court in North Carolina to temporarily freeze the assets of the Global Asset Financial Services Group, which the FTC claims ran a so-called “phantom debt” scheme in which employees masqueraded as attorneys or legal assistants to coerce consumers into paying up. Regulators said consumers lost more than $4 million.

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The companies and individuals named as defendants in the FTC suit:

• GAFS Group

• Regional Asset Maintenance

• 10D Holdings Inc.

• Trans America Consumer Solutions

• Midwestern Alliance

• LLI Business Innovations

• TACS I

• TACS II

• TACS III

• Cedar Rose Holdings & Development Inc.

• Their principals: Ankh Ali, Aziza Ali, Kenneth Moody, David Carr, Jeremy Scinta, Omar Hussain

This is a good example of why it is important to know the entity that is collecting and have a breakdown of the claim.  In addition to collecting debts that weren’t owed, the FTC alleged:

…the debt collectors often called a customer’s family and friends, and also used abusive and threatening language to intimidate people, the FTC said. To extract payment, they allegedly claimed that refusing to pay debts would result in arrests or criminal prosecution.

Even if the debt is valid, debt collectors are prohibited from improperly disclosing debt information to third party friends and family members.

Click here for more information on improper debt collection.