WASHINGTON – The Federal Trade Commission on Wednesday launched a massive sweep against harmful debt collection practices in coordination with other federal, state and local authorities.

The nationwide crackdown on debt collectors, called "Operation Collection Protection," is the first federal-state enforcement initiative of its kind and includes the Consumer Financial Protection Bureau, the Department of Justice, 47 state attorneys general and 17 state regulators.

The FTC also announced five more enforcement actions against debt collectors among 115 actions that have been taken under the initiative to date this year.

"Consumers and rogue collectors alike should know that today's announcement is not the end of operation collection protection or the FTC's vigilance in this arena," FTC Chairwoman Edith Ramirez said during a press conference Wednesday. "We will continue our aggressive law enforcement against abuse" and "we'll continue to work with our law enforcement partners and the debt collection industry to combat unlawful behavior."

Regulators are specifically targeting companies that harass consumers in trying to collect debt that they either did not owe or have already paid off. Illinois Attorney General Lisa Madigan said during the conference that they now receive more complaints on debt collection than any other type of complaint.

"Complaints about illegal and abusive debt collection practices have really skyrocketed ever since 2008 and our countries economic collapse," Madigan said. "Most of the time, the calls and complaints that we receive are not from people who actually have debt."

Regulators call the illegal collection of false debt "phantom debt." Among the five cases released on Wednesday, the FTC and Illinois AG announced a $6.4 million settlement against K.I.P. LLC that a married couple ran to collect phantom debt. The settlement is pending court approval.

The other actions were against: BAM Financial, Delaware Solutions and National Check Registry. The fifth company has not yet been named since it was filed under seal.

The operations of BAM Financial and Delaware Solutions were already halted by a temporary restraining orders issued in October. And the FTC has pending settlements with National Check Registry in New York. The named individuals in the pending settlements of K.I.P. and National Check Registry were banned from working in the debt collection industry for life.

Overall, the FTC has final judgments on seven debt collection cases so far this year totaling more than $88 million and banning 24 individuals from the industry.

Madigan also gave a warning about selling debt to other collectors when the debt was for the wrong amount or owed by the borrower. She noted a $216 million settlement against Chase Bank brought by state and federal authorities who alleged that the megabank illegal collected credit card debt. Part of the massive settlement included banning Chase from certain debt resales.

In the case with Chase's debt sales, "if that information was incorrect in terms of the individual or the amount, you had subsequent debt buyers who are going after people, again, who either don't owe that debt or they've already paid off that debt," Madigan said. "And yet, you have the same types of intimidating, harassing behaviors that takes place."

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