FTC: Deceptive Debt Collectors Must Pay $3.3 Million In Consumer Refunds

We here at Consumerist are always a little happy when deceptive debt collection businesses get what’s coming to ‘em from the Federal Trade Commission. But those feelings grow exponentially when we find out said company will be forking over millions of dollars to refund abused consumers.

Such is the case today after the FTC announced a settlement, in which the principal owners of Rincon Debt Management are permanently banned from participating in the debt collection business and will surrender $3.3 million worth of assets to be refunded to victims.

Jason R. Begley and Wayne W. Lunsford collected debts nationwide through the operation of several businesses in Corona, CA, some of which continue to be under litigation.

The original FTC complaint alleges that Begley and Lunsford deceived and abused Spanish- and English-speaking consumers – making bogus, and illegal, threats that consumers had been sued or could be arrested over debts they often did not owe.

The defendants allegedly violated the Federal Trade Commission Act and the Fair Debt Collection Act by calling consumers and their employers, family, friends and neighbors, posing as process servers seeking to deliver legal papers that were purported to be related to a lawsuit.

In some instances, the defendants allegedly threatened that consumers would be arrested if they did not respond to the calls. At other times, the defendants and their employees would pretended to be attorneys or employees of a law office in order to demand that consumers pay court costs and legal fees.

Under the settlement, the defendants were imposed a $23 million judgment which will be suspended due to their inability to pay, except for a $3 million in frozen funds and personal assets the defendants agreed to surrender, the FTC reports.

FTC Obtains more than $3.3 Million for Consumers; Defendants Agree to be Permanently Banned from the Debt Collection Business [Federal Trade Commission]