A Houston collection agency and its president and sole shareholder agreed to a federal court order banning the allegedly deceptive tactics the company has been using to bully consumers into paying debts and unnecessary fees.
RTB Enterprises, Inc., which does business as Allied Data Corporation, and Raymond T. Blair, according to a complaint filed by the Federal Trade Commission, violated the FTC Act and the Fair Debt Collection Practices Act by using false and deceptive methods to collect more than $1.3 million in "convenience fees" and "transaction fees" from consumers who authorized payments by telephone.
The federal court order imposes a penalty of $4 million, which will be partially suspended based on inability to pay once Blair surrenders assets totaling $100,000.
The order also requires Blair to relinquish a luxury motor home and prohibits him and his company from repeating any of the deception alleged in the complaint.
The defendants allegedly trained their collectors to deceive consumers into believing that payments were not accepted by U.S. mail and that the fees were unavoidable. In some cases, the fees were added to consumers accounts without their knowledge or consent, the FTC charged.
Blair could not immediately be reached for comment.
The FTC noted that the defendants collectors deceived both English and Spanish- speaking consumers by claiming to speak for attorneys, threatening to sue consumers who did not pay and using deceptive schemes to coerce consumers into paying or providing their personal information.
"Its illegal for debt collectors to lie, make false threats, use a false identity, or trick people into paying a debt or an unauthorized fee," said Jessica Rich, director of the FTCs Bureau of Consumer Protection. "The FTC will continue to protect consumers from deceptive or abusive debt collection practices, regardless of whether the deception or abuse occurs in English, Spanish, or any other language."