A U.S. district court has stopped an operation based in Atlanta and Cleveland that allegedly used deceptive and threatening tactics to collect payday loan debts that consumers either did not owe, or did not owe to the defendants.
The court order, a request from the Federal Trade Commission, freezes the defendants assets to preserve the possibility of providing redress to consumers, and appoints a receiver.
The complaint names Lisa J. Jeter, Nichole C. Anderson, Hope V. Wilson, Angela J. Triplett, DeMarra J. Massey, and their companies Pinnacle Payment Services LLC, Velocity Payment Solutions LLC, Heritage Capital Services LLC, Performance Payment Processing LLC, Credit Source Plus LLC (Ohio), Credit Source Plus LLC (Georgia), Reliable Resolution LLC, Premium Express Processing LLC (Ohio), and Premium Express Processing LLC (Atlanta).
The defendants operated under a host of fictitious business names that implied an affiliation with a law firm or a law enforcement agency, such as Global Legal Services, Allied Litigation Group, United Judgment & Appeals, Dockets Liens & Seizures and United Judgment Center, the FTC alleges.
Using robocalls and voice messages that threatened legal action and arrest unless consumers responded within a few days, the defendants have collected and processed millions of dollars in payment for phantom debts, according to the complaint. Their practices generated almost 3,000 complaints to the FTCs Consumer Sentinel.
According to documents filed with the court, a typical message stated: [T]his is the Civil Investigations Unit. We are contacting you in regards to a complaint being filed against you, pursuant to claim and affidavit number D00D-2932, where you have been named a respondent in a court action and must appear. There is a contact number on file which you must call, 757-301-4745. Please forward this information to your attorney in that the order to show cause contains a restraining order. You or your attorney will have 24 to 48 hours to oppose this matter.
Working out of offices in Cleveland and Atlanta, the defendants threatened consumers that if they did not pay, their bank accounts would be closed, their wages would be garnished, they would face felony fraud charges, they would have to appear in court thousands of miles from their homes or they would be arrested at their workplace, according to documents filed with the court.
Many consumers ended up paying the defendants for debts they did not owe because they feared the threatened repercussions of failing to pay, believed the defendants were legitimate and collecting real debts, or simply wanted to stop the harassment, according to the complaint.
The complaint charges the defendants with violating the FTC Act and the Fair Debt Collection Practices Act by falsely telling consumers that:
- they were delinquent on a payday loan or other debt that the defendants had the authority to collect;
- they had the legal obligation to pay the defendants;
- they would be arrested or imprisoned if they did not pay; and
- the defendants had taken or would take legal action.
The complaint also charges that the defendants illegally called consumers at inconvenient times or places, including at their workplaces, despite being asked to stop; disclosed supposed debts to family members, employers, and other third parties; harassed consumers with repeated calls; failed to disclose their identity as debt collectors; and failed to provide a required written notice telling consumers how to dispute the alleged debts.
It's the FTCs fifth recent case involving allegedly fraudulent, online payday-loan-related operations. Other cases include
