Federal Crackdown on Abusive Debt Collection

Consumers in Oak Park, Illinois and across the country are struggling during the coronavirus pandemic. Many have lost their jobs, and some are considering the possibility of consumer bankruptcy. When you are already struggling with substantial debt, enduring abusive debt collection practices can be devastating. Debt collectors are required to abide by the federal Fair Debt Collection Practices Act (FDCPA), but many debt collectors violate federal law. According to a recent news release from the Federal Trade Commission (FTC), the FTC in conjunction with “more than 50 federal and state law enforcement partners,” initiated a “law enforcement and outreach initiative to protect consumers from phantom debt collection and abusive and threatening debt collection practices.”

Taking Enforcement Actions Through Operation Corrupt Collector

The newest initiative from the FTC and its partners is called Operation Corrupt Collector, and it “includes five FTC law enforcement actions,” which include three previous settlements and two new cases. The cases primarily involve debt collectors engaged in “phantom debt collection,” which the FTC explains is a practice in which companies try “to collect debts they cannot legally collect or that a consumer does not owe.” For example, these types of abusive debt collection actions include attempting to collect debts for which the statute of limitations has passed, and trying to get unknowing debtors to revive the debt. Phantom debt collection can also involve attempts to collect debt from people who never owed it in the first place.

Illinois is one of many states that is part of the operation, along with Arizona, California, Colorado, Connecticut, Florida, Idaho, Indiana, Massachusetts, New Mexico, North Carolina, North Dakota, New York, Ohio, South Carolina, and Washington. Beyond joining in the enforcement actions against abusive debt collectors, many states have also developed new plans designed “to help consumers know their rights when it comes to debt collection,” and to learn more about “what steps to take if they receive a call trying to collect on a debt that they do not recognize.”

In 2020, the FTC has received more than 85,000 complaints about abusive debt collection practices, and nearly half of them concerned phantom debt collection. In hopes of gathering additional information about phantom debt collectors, the FTC has also developed an online dashboard that provides consumers about abusive debt collectors and reports from other consumers.

Details About the Recent FTC Actions

What are the two recent cases that have been filed through Operation Corrupt Collector? The FTC’s actions target two separate debt collection companies: National Landmark Logistics, LLC and Absolute Financial Services, LLC.

The case against National Landmark Logistics, LLC alleges that the debt collector used unlawful debt collection practices to obtain more than $12 million from various consumers across the country. The FTC argues that the debt collector “used robocalls to leave deceptive messages claiming consumers faced imminent legal action about debts.” The case against Absolute Financial Services, LLC alleges that the debt collector used illegal debt collection practices to obtain $5.2 million from consumers, including “deceptive robocalls alleging that consumers owed debt and faced legal action if they did not reply.”

Learn More from an Oak Park Consumer Protection Attorney

If you have questions about your rights as a debtor, one of our Oak Park consumer protection lawyers is here to help. Contact the Emerson Law Firm today for more information.


See Related Blog Posts:
Sole Proprietorships and Bankruptcy: What are the Options?
Are Consumer Bankruptcy Filings Problematically Low?


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