Asset Capital and Management Group (“Asset”), a debt collector based in Southern California, has agreed to a $4 million settlement with the Federal Trade Commission to resolve allegations that it extorted payments from consumers by using false threats. According to the FTC, Asset and its principals employed a vast network of related companies and used fictitious names to illegally extract payments from consumers for credit card debts. Their deceptive practices included posing as process servers in calls to consumers and third parties; falsely threatening consumers with lawsuits, wage garnishment, seizure of their property, and arrest; and threatening to disclose debts to consumers’ employers, colleagues, and family members. The FTC further alleged that Asset failed to inform consumers that they were attempting to collect a debt and failed to notify consumers of their right to dispute and obtain verification of their debt. These abusive tactics violated both the FTC Act and the Fair Debt Collection Practices Act.
At the request of the FTC, a Los Angeles federal court stopped Asset’s operation in July 2013 and froze the defendants’ assets. In total, the settlement imposes judgments of $90.5 million; however, the judgments against the individual defendants will be suspended when they surrender their personal assets. The proceeds of the settlement, including the sale of those assets, total more than $4 million, which will be used to provide refunds to consumers.
The settlement also bans the defendants from the debt collection industry, as well as from making any misrepresentations in connection with the sale of credit repair, debt relief, mortgage assistance relief, or lending services.