The Federal Trade Commission on Wednesday published its annual summary of debt collection enforcement activities, stating in the past year it has continued "aggressive enforcement" of the Fair Debt Collection Practices Act by bringing or resolving nine collection cases.

In 2013, the FTC obtained court orders stopping illegal debt collection activities in seven cases, and referred two other debt collection cases to the Department of Justice for civil penalties.  

In several of the cases, the FTC obtained temporary restraining orders halting the unlawful conduct, freezing the defendants’ assets and appointing receivers to take over operations while court proceedings progressed (Asset & Capital Management Group and Goldman Schwartz Inc.).

The FTC, the report states, also brought its first enforcement action regarding text message debt collection in a case involving National Attorney Collection Services Inc. and continued to pursue “phantom” debt collectors in separate cases involving Pinnacle Payment Services LLC and Pro Credit Group LLC.

The FTC ordered Expert Global Solutions, described as the world's largest debt collection firm, to pay a $3.2 million finefor allegedly making illegal collections calls and not verifying debt in dispute. It is the agency’s highest debt collection civil penalty.

Expert, based in Plano, Texas, is the holding company for collections giant NCO Financial Systems Inc., as well as ALW Sourcing LLC, Transworld Systems Inc. (which does business as North Shore Agency Inc.) and several other companies.

The FTC obtained separate orders banning the responsible parties - Forensic Case Management Services Inc. and Goldman Schwartz Inc. - from ever again participating in debt collections.

"When it comes to debt collection, the FTC has many tools in its arsenal, including research, enforcement, and consumer education,” said Jessica Rich, director of the agency’s Bureau of Consumer Protection. “But in the years since the financial crisis hit, we have increased our emphasis on law enforcement.”

The FTC also filed three amicus briefs in the last year.

In its brief for the Seventh Circuit, the FTC argued that a payday lender’s mandatory pre-dispute arbitration clauses may be unconscionable, in part because they require alleged debtors to arbitrate in a remote tribal court, effectively pressuring those consumers to abandon their legal claims or defenses. 

The FTC joined the Consumer Financial Protection Bureau in filing two other amicus briefs.  

The first, submitted to the Seventh Circuit, argued that a debt collector violates the law whenever its communications tend to deceive or mislead consumers into believing that a time-barred debt could be the subject of a collection suit.  

The second, submitted to the Second Circuit, argued that debt collectors whose process servers failed to notify consumers that they were being sued violate the Fair Debt Collection Practices Act, which broadly prohibits deceptive and unfair collection practices in any form.

Besides enforcement, the FTC’s debt collection program includes education and public outreach as well as research and policy initiatives, according to the annual report.

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