In August, the United States District Court for the Northern District of Georgia entered the Federal Trade Commission’s stipulated order banning a group of debt collectors from the debt collection business and collectively fining them $4.4 million.
The FTC filed a Complaint in November 2015 against defendants National Client Services LLC, Omar Smith, and Ernest Smith, for violations of the Federal Trade Commission Act and the Fair Debt Collection Practices Act. According to the FTC, the defendants contacted consumers and demanded payment of debts despite the consumers’ dispute of the debt. The defendants also failed to verify whether consumers owed debts after receiving the consumers’ dispute letters. According to the FTC, the defendants engaged in additional collection violations by impersonating law enforcement officials and threatening to arrest consumers who did not pay.
The stipulated order banned the defendants from all debt collection activities and prohibited the defendants from misrepresenting material facts about financial service products. The defendants are also banned from profiting from any exchange of consumers’ personal information and are ordered to destroy all personal information previously received from consumers. Finally, the defendants are ordered to pay a fine of $4.4 million, representing disgorgement of all money received from consumers.
The case is FTC v. National Payment Processing LLC, et al., Case No. 1:15-cv-3811.