Last year, the Federal Trade Commission (FTC) filed suit in the U.S. District Court for the Northern District of Georgia, alleging Global Circulation, Inc. (GCI) and its owner, Kenneth Redon III, violated the FTC Act, Fair Debt Collection Practices Act and its associated Regulation F, § 521 of the Gramm-Leach-Bliley Act, and the FTC’s Trade Regulation Rule on Impersonation of Government and Businesses. On May 1, the FTC announced the parties entered into a stipulated permanent injunction and money order, prohibiting GCI and Redon from any further debt collection activities.

The FTC’s amended complaint asserted 14 counts against the defendants for engaging in deceptive and abusive practices. Specifically, regulators alleged that the defendants, under their own name and several others, would contact consumers about debts they did not owe or GCI did not have authority to collect. These false debts were generally owed to small dollar or other specific lenders. In most cases the alleged debts were already paid in full or never sold as charged-off loans, and in some instances never existed at all. Because the named creditors were often consumers’ prior creditors, the consumers had reason to believe the defendants’ representations were legitimate. The FTC further contended that the defendants commonly failed to inform the consumers they were debt collectors attempting to collect a debt, threatened legal action with consequences such as garnishment, seizure of assets, arrest, or charges of bank fraud, called consumers multiple times a day, contacted family members repeatedly and asserted legal action was imminent, claimed they were affiliated with the creditors, possessed or claimed to possess private information, and failed to provide a notice with the amount of the debt, name of the creditor, and the required disclosures regarding the right to dispute. Defendants collected over $4.5 million from consumers using these tactics.

The FTC obtained a temporary restraining order in November 2024, shutting down the fraudulent debt collection scheme, and a receivership was put into place. Under the proposed stipulated order, the defendants are permanently banned from debt collection and debt brokering and the defendants and their officers, agents, employees, and attorneys are prohibited from misrepresenting any material fact related to the sale, promotion, or marketing of any good or service, making any false statements to obtain private information from consumers, or impersonating any business or person. The receivership will remain in place as a permanent receiver to liquidate all assets. A judgment of $9,684,338 will be entered in favor of the FTC, which will be suspended provided all financial holdings of both defendants from multiple banks and businesses are transferred to the receivership and certain transfers from Redon are made. However, the full judgment will become due if either defendant is found to have lied about their finances. Finally, the defendants are required to provide certain acknowledgements, reporting, and recordkeeping over the next twenty years.