Late last month, the Federal Trade Commission (FTC) filed suit against Global Circulation, Inc. (GCI) and its owner for engaging in deceptive and abusive debt collection practices. According to the FTC, the Georgia-based debt collector tricked consumers into paying more than $7.6 million in bogus debt. The lawsuit, filed in the United States District Court for the Northern District of Georgia, Atlanta Division, alleges violations of Section 5(a) of the FTC Act, the Fair Debt Collection Practices Act (FDCPA), and the Gramm-Leach-Bliley Act (GLB Act).

The FTC’s complaint alleges that the defendants falsely claimed that consumers owed money on payday loans or other debts, often using consumers’ private information to lend credibility to their claims. It is further alleged that defendants threatened consumers with lawsuits, wage garnishment, asset seizure, and even arrest, despite lacking the authority or intention to take such actions. Defendants also allegedly contacted consumers’ family members, falsely claiming that legal action was imminent and pressuring them to relay messages to the consumers. The FTC lastly claims that defendants failed to provide required notices and disclaimers, such as the amount of the debt, the name of the creditor, and consumers’ rights to dispute the debt.

In response to the complaint, the court has temporarily halted GCI’s operations and ordered the company to turn its assets over to a court-appointed receiver. This temporary restraining order, issued on October 29, 2024, freezes the defendants’ assets and places the company under the control of a receiver while the case continues.

The FTC’s complaint further details that GCI and its owner contacted consumers under a number of fictitious company names, including Total Mediation Solutions, Total Consumer Solutions, and Consumer Impact Recovery. The company’s collectors allegedly called consumers out of the blue, threatening them with arrest, wage garnishment, and lawsuits if they did not pay a supposed debt. According to the complaint, the debts GCI attempted to collect either did not exist at all or were not debts GCI could legally collect.

The FTC seeks a range of remedies, including temporary, preliminary, and permanent injunctive relief, and monetary relief.