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    Identity Theft Tops FTC’s Consumer Complaint Categories Again in 2014

    Saturday, February 28th, 2015

    Identity Theft Tops FTC’s Consumer Complaint Categories Again in 2014

    Agency Also Notes a Large Increase in Complaints About “Imposter” Scams

    FOR RELEASE

    Identity theft topped the Federal Trade Commission’s national ranking of consumer complaints for the 15thconsecutive year, while the agency also recorded a large increase in the number of complaints about so-called “imposter” scams, according to the FTC’s 2014 Consumer Sentinel Network Data Book, which was released today.

    Imposter scams – in which con artists impersonate government officials or others – moved into third place on the list of consumer complaints, entering the top three complaint categories for the first time. The increase in imposter scams was led by a sharp jump in complaints about IRS and other government imposter scams. Debt collection held steady as the second-most-reported complaint.

    “While identity theft remains a huge issue, consumers should also keep a close eye out for imposter scams,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Whether it’s pretending to be the IRS during tax season, or making false promises of a lottery win, scammers are increasingly sophisticated in their efforts to deceive consumers, but the FTC will continue working to shut these scammers down.”

    The Consumer Sentinel Network Data Book is produced annually using complaints received by the FTC’s Consumer Sentinel Network. That includes not only complaints made directly by consumers to the FTC, but also complaints received by state and federal law enforcement agencies, national consumer protection organizations and non-governmental organizations.

    The report includes not only national data but also a state-by-state accounting of top complaint categories and a listing of the metropolitan areas that generated the most complaints. In 2014, 2,582,851 complaints were entered into the Consumer Sentinel Network. Florida was the top source of complaints per capita both for identity theft, and fraud and other complaints. For fraud and other complaints, Georgia and Nevada had the second and third highest per capita complaint rates, while Washington and Oregon were in the second and third position for identity theft complaints.

    The complaint categories making up the top 10 are:

    Number Percent
    Identity Theft 332,646 13 percent
    Debt Collection 280,998 11 percent
    Imposter Scams 276,662 11 percent
    Telephone and Mobile Services 171,809 7 percent
    Banks and Lenders 128,107 5 percent
    Prizes, Sweepstakes and Lotteries 103,579 4 percent
    Auto-Related Complaints 88,334 3 percent
    Shop-At-Home and Catalog Sales 71,377 3 percent
    Television and Electronic Media 48,640 2 percent
    Internet Services 46,039 2 percent

    Education Department Terminates Contracts With Debt Collectors Accused Of Wrongdoing

    Saturday, February 28th, 2015

    U.S. Department of Education to End Contracts with Several Private Collection Agencies

    After finding high incidences of materially inaccurate representations, Department acts to protect consumers
    FEBRUARY 27, 2015

    Following a review of 22 private collection agencies, the U.S. Department of Education announced today that it will wind down contracts with five private collection agencies that were providing inaccurate information to borrowers. The five companies are: Coast Professional, Enterprise Recovery Systems, National Recoveries, Pioneer Credit Recovery, and West Asset Management.

    The Department also announced that it will provide enhanced Fair Debt Collection Practices Act and Unfair, Deceptive, or Abusive Acts or Practices monitoring and guidance for all private collection agencies that work with the Department to ensure that companies are consistently providing borrowers with accurate information regarding their loans.

    “Federal Student Aid borrowers are entitled to accurate information as they make critical choices to manage their debt,” said Under Secretary Ted Mitchell. “Every company that works for the Department must keep consumers’ best interests at the heart of their business practices by giving borrowers clear and accurate guidance. It is our responsibility – and our commitment – to uphold the highest standards of service for America’s student borrowers and consumers.”

    During the past several months, the Department’s Federal Student Aid (FSA) office performed a review of all private collection agencies that FSA works with. In these reviews, the Department sought to ensure that its private collection agencies were complying with the terms of the contract, which includes assurances that the agencies would not engage in unfair or deceptive practices and would comply with all applicable Federal and State laws.

    In its review, the Department found that agents of the companies made materially inaccurate representations to borrowers about the loan rehabilitation program, which is an option that can create benefits to defaulted borrowers after they have made nine on-time payments in a period of 10 months. The five private collection agencies listed above were found to have given inaccurate information at unacceptably high rates about these benefits. In particular, these agencies gave borrowers misleading information about the benefits to the borrowers’ credit report and about the waiver of certain collection fees.

    The Department will reassign accounts held by these five agencies which are not already in repayment to other agencies. The Department will also increase monitoring to ensure that the students who began rehabilitation under the five private collection agencies will be treated fairly as they complete the rehabilitation process. Lastly, the Department will issue enhanced guidance to all remaining private collection agencies, increase internal training for FSA staff, enhance the private collection agency manual, expand monitoring for these types of issues, and refine its internal escalation practices.


    FSA administers and oversees the federal student financial assistance programs, authorized under Title IV of the Higher Education Act of 1965 (HEA). These programs represent the largest source of student aid for postsecondary education in the United States. The Office of the Under Secretary manages policies, programs, and activities related to postsecondary education.

    FTC, New York Attorney General Crack Down on Abusive Debt Collectors

    Thursday, February 26th, 2015

    FTC, New York Attorney General Crack Down on Abusive Debt Collectors

    Charges Cite Harassing Conduct, False and Deceptive Claims Made to Consumers

    The Federal Trade Commission, jointly with the New York State Office of the Attorney General, has filed complaints aimed at shutting down two particularly egregious and abusive debt collection operations centered in Buffalo, New York that target consumers nationwide. According to the complaints, the separate enterprises used threats and abusive language, including false threats that consumers would be arrested, to collect more than $45 million in supposed debts.

    “The Federal Trade Commission is pleased to work with the New York State Attorney General to stop abusive debt collectors,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “The cases announced today will help protect consumers from debt collectors that disregard the law in an attempt to make a buck.”

    “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,” said Attorney General Schneiderman. “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.”

    The federal court has temporarily halted defendants’ practices in both cases at the FTC’s and New York Attorney General’s request.

    4 Star Resolution LLC

    On February 9, 2015, the FTC and New York Attorney General’s Office filed a complaint against 4 Star Resolution LLC, six other corporate entities, and three individuals (collectively, 4 Star), alleging that 4 Star used abusive and deceptive tactics to pressure consumers into making payments on supposed debts.

    According to the complaint, 4 Star regularly called consumers using fictitious addresses, bogus company names, and spoofed phone numbers. After misrepresenting their names and locations, 4 Star’s collectors falsely identified themselves to consumers, claiming that they were attorneys, process servers, government agents, or criminal law enforcement officials.

    In addition, 4 Star’s collectors allegedly falsely claimed that the consumers had committed an illegal or criminal act such as bank or check fraud. 4 Star’s collectors then falsely threatened consumers with dire consequences, including arrest, imprisonment, and civil lawsuits, unless the consumers made an immediate payment on the supposed debts.

    The complaint cites several examples that illustrate the defendants’ alleged abusive and deceptive conduct. During one call to collect on a supposed debt, a 4 Star collector used the pseudonym “Detective Jeff Ramsay,” and left a message where he falsely asserted that he was seeking to serve a bench warrant on the consumer for check fraud.

    In another instance, 4 Star’s collectors falsely told a consumer that her husband had committed check and money fraud and that legal action would be taken against the husband if the debt was not paid in two days. One of 4 Star’s collectors falsely identified himself to the consumer as “Investigator Kearns” and claimed that he worked for a government agency located in Washington, DC.

    The complaint also alleges that when consumers asked for proof of the supposed debt, 4 Star’s representatives refused to provide it, and instead often told consumers they would only receive proof in court or after the debt was paid. The defendants often allegedly failed to provide written notice of the debt as required by law and failed to make required disclosures to consumers.

    Finally, the complaint alleges that 4 Star unlawfully disclosed information about supposed debtors to third parties, including friends, family members, and employers, and illegally used abusive and profane language, including routinely calling consumers such names as “idiot,” “dummy,” “piece of scum,” “thief,” or “loser.”

    Vantage Point Services, LLC

    According to the second complaint, filed against Vantage Point Services, LLC, and related corporate and individual defendants, the organization, used deceptive, unfair, and abusive tactics to pressure consumers into making payments on supposed debts.

    The complaint alleges that in collection calls to consumers the defendants often falsely claimed to be a law firm, process server, unrelated debt collection company, or entity affiliated with the government. In some instances, the defendants even posed as government agents, including FBI agents and district attorneys. In others instances, the defendants falsely told consumers they were working as an intermediary with the state, or that the state had placed the consumers’ account with them to give them a chance to pay the debt before criminal charges were filed.

    With this deceptive backdrop, the defendants falsely claimed that consumers had committed a crime and that an arrest warrant would be issued unless they made a payment. Often, the defendants told consumers that they would spend 90 or 120 days in jail, or that that would need to pay thousands of dollars in bail if they didn’t pay.

    The defendants’ conduct was not limited to people that supposedly owed the debt, however. Vantage Point made similar representations to third parties, including supposed debtors’ friends, family members, and co-workers. In some cases, the defendants falsely told third parties that the supposed debtors had committed a crime and that a warrant had been issued for their arrest.

    Finally, the complaint states that the defendants failed to provide consumers with basic information about their identity during calls, did not provided consumers with information about the supposed debt within five days of the call, as required by the Fair Debt Collection Practices Act (FDCPA), and illegally charged them a “processing fee.”

    Both complaints charge the respective defendants with violating the FTC Act and the FDCPA, as well as several New York State laws prohibiting deceptive acts and practices. In filing the complaints, the FTC and the New York Attorney General’s Office are seeking to permanently stop the defendants’ illegal conduct and to obtain money to provide refunds to consumers.

    The 4 Star defendants are: 1) 4 Star Resolution LLC; 2) Profile Management, Inc.; 3) International Recovery Service LLC; 4) Check Solutions Services Inc.; 5) Check Fraud Service LLC; 6) Merchant Recovery Service, Inc.; 7) Fourstar Revenue Management LLC; 8) Travell Thomas, individually and as a principal, manager, and/or officer of several of the corporate defendants; 9) Maurice Sessum, individually and as a principal, manager, and/or officer of several of the corporate defendants; and 10) Charles Blakely III, individually and as principal, manager, and/or officer of Merchant Recovery Service, Inc. The complaint also alleges that the corporate defendants conducted business through approximately two dozen fictitious names.

    The Vantage defendants are: 1) Vantage Point Services, LLC; 2) Payment Management Solutions, Inc.; and 3) Gregory MacKinnon; 4) Megan Vandeviver; and 5) Angela Burdorf, each individually and as an officer of one or more of the corporate defendants.

    The Commission vote authorizing the filing of each complaint was 5-0. The complaints against 4 Star and Vantage Point Services were filed in the U.S. District Court for the Western District of New York.

     

     

    Title Loan Company

    Thursday, February 26th, 2015

    Please contact us if Title Loan Company  has sued you or you have received a dunning letter on one of its loans.

    Opportunity Financial

    Thursday, February 26th, 2015

    Please contact us if Opportunity Financial has sued you or you have received a dunning letter on one of its loans.

    Archerfield Funding

    Tuesday, February 24th, 2015

    Please contact us if Archerfield Funding has sued you or you have received a dunning letter on one of its loans.

    FTC Goes After Debt Relief Companies Who Deal With Payday Loans

    Monday, February 23rd, 2015

    Complaint is Agency’s First against Defendants Promising Payday Loan Debt Relief

    The Federal Trade Commission has filed a complaint in federal district court, aiming to stop an operation that has targeted consumers with outstanding payday loans, saying they could help resolve those debts but then providing little or none of the financial relief they promised. As a result, many consumers stopped making payments to the original lenders and found themselves in even deeper financial trouble, having paid hundreds of dollars in fees for no benefit.

    “The defendants promised to help people struggling to make payments on their payday loans,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Instead, they took the money and ran, leaving their customers deeper in debt.”

    According to the FTC’s complaint against Payday Support Center, LLC, now known as PSC Administrative, LLC, and related parties, starting in August 2012 the defendants have used the Internet, radio, and telemarketing to target consumers who owe multiple debts on payday loans, which are typically short-term loans with high interest rates.

    The FTC alleges that the defendants induce consumers into enrolling in their “financial hardship program” by claiming that they will negotiate with the lenders to reduce consumers’ payments and eliminate their debt. They advise consumers to stop making direct payments to their lenders and to pay money to the defendants instead, promising that within four to six months, the loans will be paid off.

    Their radio and the Internet advertisements include statements such as:

    • “Are payday loans ruining your life? Do you have more payday loans than you’re able to pay back right now? If you have two or more payday cash advance loans, listen closely…”
    • “All you need is two or more payday loan cash advances to qualify. Even if you’re behind, in collections or have bad credit. We’ll even help you with your internet payday loans…”

    The FTC alleges that, in telemarketing calls targeting these financially distressed consumers, the defendants say that they have gone through a “qualifications check,” and that consumers are confirmed to participate in their special “financial hardship program.” They then promise to “get rid of,” “pay off,” or “take care of” all of the consumers’ payday loan debts.

    They allegedly also tell consumers that they will negotiate “interest free” payment on the loans through the program, falsely implying that the debts would be paid off, free of all interest and fees. As part of the program, the defendants require consumers to make bi-weekly payments to them, typically between $98 and $160.

    In reality, the FTC alleges, the defendants provide little or no debt relief services for their clients, and their limited actions do not generally eliminate or even reduce most clients’ payday loans. While the defendants send “validation” form letters to some lenders, the lenders typically have ignored these letters and continued their collection efforts.  Based on this conduct, the FTC has charged the defendants with violating the FTC Act, which prohibits deceptive acts and practices, and the agency’s Telemarketing Sales Rule, which prohibits abusive and deceptive telemarketing practices.

    The complaint names as defendants: 1) PSC Administrative, LLC, formerly known as Payday Support Center, LLC; 2) Coastal Acquisitions, LLC, doing business as Infinity Client Solutions; 3) Jared Irby, individually and as an officer of PSC Administrative, LLC; and 4) Richard Hughes, individually and as an officer of PSC Administrative, LLC.

    In filing the complaint, the FTC is seeking to permanently stop the defendants’ allegedly illegal conduct, as well as a monetary judgment for refunds to return to consumers defrauded by the operation.