Accounts Receivable Management Featured Article

FTC Settlement Bans Individuals from Working in Debt Collection Industry

January 21, 2013

If you’re in the debt collection business, you can be fairly sure you’ve done something wrong when the Federal Trade Commission (FTC (News - Alert)) permanently bans you from working in the business in the future. This is precisely what the FTC has done to four individuals working for the firm Rumson, Bolling & Associates and associated companies.

As part of a crackdown on scams that target consumers in financial distress, the FTC filed a complaint in 2011 against six people and three companies involved in a Van Nuys, California-based debt-collection scam. The individuals and companies were accused of engaging in abusive and illegal debt collection practices. Though the business was centered in Van Nuys, the business had outlets across the U.S.

According to the FTC, the individuals in the case harassed and abused consumers by threatening physical harm and death to them and their pets, threatened to desecrate the bodies of deceased relatives, and used obscene and profane language. They also improperly revealed consumers' debts to third parties, such as the consumers' employers, co-workers, neighbors, and family members; falsely threatened consumers with lawsuits, arrest, seizure of their assets, or wage garnishment; and falsely claimed that consumers would be liable for legal fees incurred in the collection of the debt.

In addition to abusing debtors, the individuals and businesses are charged with deceiving their clients.  Though the companies claimed to collect debts on a contingency basis (without charging for unsuccessful attempts), it is alleged that the defendants collected money for a client, then kept all of the money or more than they were entitled to keep. In some cases, the defendants asked clients for additional fees, purportedly for legal expenses in filing a lawsuit that would “guarantee” the successful collection of a debt, according to the FTC’s filings.

Suits against three of the individuals involved were settled last year, and the latest settlement is against three more defendants, who have been ordered to pay $700,000 (the original judgment of over $33 million was reduced when it became apparent that the defendants could not pay), and are permanently banned from the debt collection business. They are: David M. Hynes II and Lorena Quiroz-Hynes of Rumson, Bolling & Associates, as well as James S. Hynes and Heather True of several related companies.

The defendants are accused of violating the Fair Debt Collection Practices Act, which bars deceptive, abusive, and unfair debt collection practices, and the FTC Act, which more generally bars deceptive and unfair commercial practices.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida.  Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.




Edited by Brooke Neuman

Article comments powered by Disqus

Related Accounts Receivable Management Articles

LocateSmarter Reveals Features of New Online Skip Tracing Application

LocateSmarter, LLC, a new online batch skip tracing application has recently announced its patent-pending features. LocateSmarter is a subsidiary of CBE Companies, founded in 2012 as a Business-Process-as-a-Service (BPaaS) company. It works to improve efficiency of batch skip tracing by sending your records to several data providers at once-with LocateSmarter you can send your files to one centralized location and receive information from multiple sources. [ Read More ]
07/23/2014

Accelya's REVERA Next to Propel GoAir Even Higher

Airlines have to operate in very challenging environments, and as the airline industry evolves changing business models, constant pressure of industry and regulatory compliances call existing practices into question. GoAir, one of India's fastest growing airlines, thus decided to address the challenges of its revenue accounting process, and turned to Accelya for help. [ Read More ]
07/23/2014

EGS to Sell Part of Accounts Receivable Management to Platinum Equity

To increase focus on its core business segments and services, Expert Global Solutions (EGS) is selling certain segments of its Accounts Receivable Management (ARM) business to Platinum Equity, a Los Angeles-based private equity firm specializing in business operations. The dollar value of the transaction has not been disclosed yet. The sale of Transworld Systems, Inc. will include Transworld Systems, Education, Attorney Network, Healthcare Bad Debt, Government and U.S.-based Third Party Collecti… [ Read More ]
07/17/2014

e2b Teknologies Wins New Customer for its Anytime Collect Solution

e2b teknologies, publishers of Anytime Collect accounts receivable management software, has recently won a new customer for its Anytime Collect for automated QuickBooks accounts receivable management. The name of the company has not been disclosed. [ Read More ]
07/17/2014
FREE Accounts Receivable Management enewslettter.

Events

Weekly Live Demo
Contact Center Solutions

Register Today!


Weekly Live Demo
CaaS Small Center

Register Today!