On Thursday, the Federal Trade Commission announced that it received a U.S. District Court order to shut down an operation that collected millions of dollars by allegedly misrepresenting that they were with the government, falsely accusing consumers of committing check fraud, and threatening costumers with arrest. The order freezes the assets of the operation pending a March 17 hearing.
According to the FTC complaint, Mark Briandi and William Moses, along with 13 interrelated companies, are charged with violating the Federal Trade Commission Act and the Fair Debt Collection Act.
The defendants allegedly bought and collected debts owed to other companies. Most debts the defendants collected on originated from payday loans.
During the scheme, which operated since at least May 2010, the defendants allegedly portrayed themselves as representatives of the government by using company names that suggested a government affiliation or national presence, such as Federal Recoveries, LLC, Federal Check Processing, Inc, Federal Processing Services, Inc., Nationwide Check Processing, and State Check Processing, Inc.
Consumers were threatened with dire consequences, such as lawsuits, arrest and imprisonment or seizure of assets, unless they paid their debt immediately.
The complaint alleges that the defendants often used the same tactics to approach a consumers’ family members, friends, co-workers and employers and revealed the consumers’ debts to these people.
According to consumer interviews conducted by the FTC, the defendants refused to provide information about the debt, as required by federal law. They also allegedly refused to investigate the debt’s legitimacy after consumers said they did not owe the debt or it had been paid in full.
In addition to Briandi and Moses, the complaint names as defendants Federal Check Processing, Federal Recoveries, Federal Processing, Federal Processing Services, United Check Processing, Central Check Processing, Central Processing Services, American Check Processing, State Check Processing, Check Processing, Nationwide Check Processing, US Check Processing, and Flowing Streams. The complaint names Empowered Racing LLC as a relief defendant since the company was not actively involved in the scheme but benefited from it.
Thursday’s complaint is part of the FTC’s ongoing crackdown on scams that target consumers in financial distress.
In April 2012, the agency put a stop to a California scam that took in around $5.2 million using deceptive tactics to collect debts from consumers.
At FTC’s Request, Court Halts Debt Collector’s Allegedly Deceptive and Abusive Practices, Freezes Assets [Federal Trade Commission]