Just like one of those action movies where a federal agent gets paired up with a small-town sheriff who knows all the bad guys in the area, the Federal Trade Commission has brought its crackdown on abusive debt collectors to New York and partnered with the Empire State’s attorney general to shut down a pair of unsavory operators.

The FTC and NY AG Eric Schneiderman announced the joint complaints against two Buffalo-based debt collection companies that allegedly used threats and abusive language to collect more than $45 million from consumers nationwide.

According to first complaint [PDF], the FTC and AG’s office allege that Four Star Resolution LLC regularly called consumers using fictitious addresses, bogus company names, and spoofed phone numbers in attempts to collect million of dollars in supposed debts.

As part of the alleged scheme, Four Star operators falsely identified themselves to consumers, claiming they were attorneys, process servers, government agents, or law enforcement officials.

In some instances, the collectors claimed the consumers had committed an illegal or criminal act and subsequently threatened them with arrest, imprisonment, or lawsuits unless payment was made immediately.

During one call cited in the complaint, a collector used the pseudonym “Detective Jeff Ramsey,” and left a message where he falsely claimed he was seeking to serve a bench warrant for the consumer related to check fraud, the FTC reports.

When consumers asked collectors for proof of the supposed debt, representatives from the company refused to provide it, instead saying they would receive evidence in court.

In addition to deceiving consumers, the FTC and Schneiderman allege the company often disclosed information about supposed debts to third parties, such as friends, family members and employers.

According to the second complaint [PDF] filed by regulators, Vantage Point Services, LLC, and related corporate and individual defendants, used deceptive, unfair and abusive tactics to pressure consumers into paying for purported debts.

The complaint alleges that representatives for the company placed calls to consumers falsely claiming to be a law firm, process server, unrelated debt company or entity affiliated with the government.

In some cases, consumers reported that the callers claimed to be from the government – including FBI agents and district attorneys – or that they were working as an intermediary with the state.

Collectors then claimed that consumers had committed a crime and would be arrested if they didn’t make a payment on the supposed debt.

Similar to tactics used by Four Star, representatives for Vantage Point also refused to provide consumers with basic information about their purported debt as required by the Fair Debt Collection Practices Act (FDCPA).

Additionally, the company allegedly provided information about the debts to third parties, often telling family, friends and employers that the supposed debtor had committed a crime and would be arrested.

Both Vantage Point and Star 4 have been charged with violations of the FTC Act and FDCPA, as well as several New York state laws.

The FTC and New York Attorney General’s Office are seeking to permanently stop the collectors’ illegal conduct and provide refunds to affected consumers.

“Today’s action should make it clear that nobody is above the law, and when shady debt collectors engage in illegal and abusive business practices, they will be held accountable,” Attorney General Schneiderman said in a statement. “The use of threats, including the threat of arrest, to collect debts is unconscionable, and I am pleased to partner with the FTC to stand up for consumers against these bad actors.”

FTC, New York Attorney General Crack Down on Abusive Debt Collectors [Federal Trade Commission]
A.G. Schneiderman Announces Joint Lawsuits With Federal Trade Commission Against Abusive Debt Collectors In Buffalo Area [New York Attorney General’s Office]

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