To settle Federal Trade Commission charges that it violated federal law, a debt collection firm and its owner have agreed to pay $2.25 million, the largest civil penalty obtained by the agency in a collection case.

Academy Collection Service Inc. of Philadelphia, owned by Keith Dickstein, "misled, threatened, and harassed consumers; disclosed their debts to third parties; and deposited postdated checks early, in violation of federal law," the FTC said Friday.

(Neither Mr. Dickstein nor the company admitted wrongdoing in the settlement, which was approved by the U.S. District Court of Nevada in Las Vegas.)

Academy's collectors used "false or deceptive threats of garnishment, arrest, and legal action" and "unauthorized withdrawals from consumers' bank accounts," the regulator said. The company called consumers at work whose employers forbade them to take such calls, the FTC said.

More than 1,000 complaints against Academy were filed with the FTC, various state attorneys general, the Better Business Bureaus of Pennsylvania and Nevada, and the company itself, the FTC said. Academy dismissed consumer complaints "without sufficient investigation," and collectors who were fired for violating the Fair Debt Collection Practices Act "often returned to work within a few weeks or months."

The settlement also requires Academy to change practices. Among other things, it must "clearly and conspicuously disclose to consumers that they may stop Academy from contacting them about the debt."

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