Chicago Attorney General and FTC Settle with Debt Collectorsdebt

Do you live in the Chicago area, and were you contacted in the last several years by a debt collection company attempting to collect a debt that you did not think you owed? In some cases, debt collection companies may not know that a debtor has settled a debt and thus continue to make collection attempts. In other cases, however, fake debt collectors violate the Fair Debt Collection Practices Act (FDCPA) and attempt to scam consumers. According to a recent press release from Attorney General Lisa Madigan’s office, the Illinois Attorney General and the Federal Trade Commission (FTC) have reached “three separate settlements totaling $47 million with the operators of a Chicago-area fake debt collection scheme.”
If you have been harassed by a debt collector, it is important to learn more about the settlements and how they could impact consumers in Oak Park.
Payday Loans and Phantom Debt
The settlements arose from Operation Collection Protection, a crackdown operation that brings together federal and state officials to handle abusive debt collection practices.
Generally speaking, the settlements address tactics used against consumers who “obtained or applied for payday or other short-term loans.” The companies that have agreed to the settlement include Stark Law, Stark Recovery, and Capital Harris Miller. According to the news release, over the last two years, these debt collectors “pretended to be a law firm with authority to sue and obtain substantial judgments against delinquent consumers.” In addition, the companies “sold bogus payday loan debt portfolios to other debt buyers, who then tried to collect the fake debts.
According to Madigan, “The Stark Law Firm and its affiliates coerced consumers through lies and threats into paying fake or ‘phantom’ debt—debts consumers had already paid back or never owed in the first place.”
Repercussions and Remedies for Deceptive and Abusive Debt Collection Practices
What are some of the consequences of the settlement? In the terms of the settlement, the debt collectors have been banned from the debt collection business entirely, and specifically from selling debt portfolios. Stark Law, Stark Recovery, and Capital Harris Miller have also been banned from “misrepresenting financial products and services, profiting from customers’ personal information and failing to dispose of such information properly.” Those are some of the repercussions for the debt collection companies engaged in abusive and deceptive debt collection practices. What about the consumers who were harmed by these actions?
As part of the settlement, the companies listed above will also be required to surrender their assets, which total at least $9 million. Certain owners will be required to surrender property and other assets. Those assets will then be distributed to consumers who were harmed by the abusive collection practices.
Seek Advice from an Oak Park Consumer Protection Lawyer
Were you targeted by an abusive or deceptive debt collector? You may be eligible to seek compensation. Whether you were harmed by one of the operators named in the recent settlement or another debt collection company, it is important to seek advice from an advocate. An experienced Oak Park consumer protection lawyer can discuss your case with you today. Contact the Emerson Law Firm for more information.
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