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

TrueAccord Closes $5 Million in Series A Funding for Machine Learning Debt Recovery Solution

Founded in 2013 by tech veterans from Silicon Valley, TrueAccord is a first-of-its-kind tech platform that seeks to transform the debt recovery system through automation, behavioral analytics and a human approach. The company's automated debt recovery platform helps to bridge the gap created between creditor and debtor by illustrating the behavioral patterns of those in debt and how to deal with them in the best way that results in recovering outstanding payments. Now, the company has announced … [ Read More ]
09/18/2014

Wipro to Offer Chesapeake's Financial Suite

Wipro, a leading information technology and consulting company, and Chesapeake, a premier financial software solutions firm, have announced a global partnership today. The alliance will allow Wipro to offer Chesapeake's suite of financial software solutions, encompassing Reconciliation Management and Balance Sheet Integrity (T-Recs Enterprise) as well as Treasury & Cash Management and Bank Payment Management (SmartTreasury and SmartAnalysis). They will be offered both as a cloud-based applicatio… [ Read More ]
09/16/2014

University of Maryland Program Prepares Students for Accounts Receivable Management Positions

University of Maryland has program that emphasizes accounts receivable worlflow automation skills. [ Read More ]
09/15/2014

Tungsten to Acquire Accounts Payable Automation Provider DocuSphere

As everyone in business is aware, there are areas within organizations that historically have been very people and time intensive, and until recently, resistant to automation for a variety of reasons. In fact, interestingly the transactional part of the business having to do with the billing and collection of money-accounts receivable (AR) and accounts payable (AP) - have been slow to adopt state-of-the-art processing and workflow automation solutions. However, this trend to be late adopters is … [ Read More ]
09/04/2014
FREE Accounts Receivable Management enewslettter.

Events

Weekly Live Demo
Contact Center Solutions

Register Today!


Weekly Live Demo
CaaS Small Center

Register Today!