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Debt Collectors Posing As Process Servers Intimidated Consumers Settle with FTC

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A Southern California debt collection operation, Asset Capital and Management Group, will surrender more than $4 million for consumer redress to settle Federal Trade Commission charges that it extorted payments from consumers using false threats.

The defendants behind the scheme will turn over their personal assets and give up any claim to the business assets, under the FTC settlements.

They also are banned from the debt collection industry.

“Consumers shouldn’t be subjected to threats and intimidation,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “We’re pleased that victims of this scheme will be getting money back from the defendants.”

The FTC alleged the defendants used a sprawling network of intertwined companies and dozens of fictitious names to illegally extract payments from consumers for credit card debt that they had purchased from creditors. According to the FTC, the defendants employed an assortment of deceptive and abusive tactics in collecting on the credit card debt, violating both the FTC Act and the Fair Debt Collection Practices Act. The FTC charged that the defendants posed as process servers in calls to consumers and third parties, falsely threatened consumers with lawsuits, wage garnishment, seizure of their property, and arrest, and disclosed debts to consumers’ employers, colleagues, and family members.

The FTC alleged that the defendants violated the Fair Debt Collection Practices Act by: improperly contacting third parties about consumers’ debts; failing to disclose the name of the company they represented, or the fact that they were attempting to collect a debt, during telephone calls to consumers; and failing to notify consumers of their right to dispute and obtain verification of their debts.

At the FTC’s request, a federal court in Los Angeles halted the operation in July 2013, froze the defendants’ assets, and appointed a receiver to take charge of the defendants’ business.

The complaint names as defendants Thai Han; Jim Tran Phelps; Keith Hua; James Novella; One FC, LLC, also doing business as Western Performance Group and WPG; Credit MP, LLC, also doing business as AFGA, CMP, AFG & Associates, AF Group, Allied Financial Group, and Allied Guarantee Financial; Western Capital Group, Inc., also doing business as ERA, LMR, WCG, and WC Group; SJ Capitol LLC, also doing business as SCG; Green Fidelity Allegiance, Inc., also doing business as WRA; Asset and Capital Management Group; and Crown Funding Company, LLC.

The Commission vote authorizing the staff to file the complaint was 4-0.

The settlements that resolve the case impose judgments totaling $90.5 million. The judgments against Thai Han, Jim Tran Phelps, Keith Hua, and James Novella will be suspended when they surrender their personal assets. The proceeds from those assets, in addition to frozen corporate funds held by the receiver, total more than $4 million, which will be used to provide refunds to consumers.

Besides the monetary judgments imposed on the defendants, and the bans on collecting debt, the settlement orders prohibit them from misrepresenting any relevant fact in connection with promoting or selling credit repair, debt relief, mortgage assistance relief, or lending services.

The tip-off that you are likely talking to a fake debt collector are: they won’t mail written confirmation of the debt or they threaten dire consequences (jail, arrest, imminent lawsuit) if payment isn’t made immediately. Before you pay a debt collector, ask for written verification of the debt. Collection agencies, by law, must send this within five days of initially contacting you.

The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.

The FTC is administered by a five-member commission. Each commissioner is appointed by the President for a seven-year term with the advice and consent of the Senate. The commission must represent at least three political parties and the President chooses from its ranks one commissioner to be chairperson. The chairperson appoints an executive director with the consent of the full commission; the executive director is responsible for general staff operations.

The Holder Rule Is the FTC’s Most Effective Tool against Fraud

Three bureaus of the FTC interpret and enforce jurisdictional legislation: the Bureau of Consumer Protection, the Bureau of Competition, and the Bureau of Economics.

On another note,

DEFENDANTS INDICTED FOR DEFRAUDING $13.5 MILLION FROM 3,500 VICTIMS IN LARGEST LOAN MODIFICATION SCHEME EVER PROSECUTED IN THE NATION
*One of the defendants was an attorney
If convicted, the defendants face maximum sentences of 27-52 years in state prison. They are being held on $9.8 million bail.

Bankers and Attorney Convicted of Fraud, False Statements, and Making a False Claim Against the United States

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