71
In FTC v. Federal Check Processing Inc., the court granted the Commission’s request for
summary judgment against a Buffalo, New York-based debt collection scheme.
140
The district
court adopted the magistrate judge’s recommendation and report that found that defendants had
violated the FTC Act and the FDCPA by falsely claiming to be government officials, falsely
threatening consumers with litigation or arrest, and systematically disclosing consumers’ debts to
their friends, family, and co-workers to coerce payment.
141
The court had previously entered an ex
parte temporary restraining order, followed by a stipulated preliminary injunction, to halt this
abusive debt collection operation. The final order bans the defendants from the debt collection
industry and requires them to pay a nearly $11 million judgment.
In United States v. Commercial Recovery Systems, Inc., a case that the FTC referred to the
Department of Justice for prosecution, the court entered summary judgment against two defendants
in an unlawful debt collection operation. The court found that the debt collectors had “repeatedly
and routinely violated the FDCPA . . . in multiple ways, by making blatantly false representations
for the purpose of intimidating consumers into paying debts.”
142
Among other things, the court
found that their routine threats to sue consumers were “patently false,” and further that they falsely
impersonated attorneys and threatened to seize or garnish consumers’ property or wages. The court
banned the two defendants from debt collection, and will determine the civil penalty amount to
impose on one of them, the president of the company.
143
Additionally, the government secured a
stipulated final order against the remaining individual defendant subjecting him to the same ban
and imposing a $496,000 civil penalty judgment (partially suspended due to an inability to
pay).
144
In January 2016, the Commission also successfully resolved its action in Warrant
Enforcement Division. The FTC’s complaint in this matter alleged that the defendants, while under
140
FTC v. Federal Check Processing, Inc., No. 1:14-cv-00122 (W.D.N.Y Oct. 13, 2016) (Judgment and Permanent
Injunction); see also Press Release, FTC Wins Summary Judgment Against Buffalo, NY-based Abusive Debt Collectors;
Defendants Banned from Collection Business (Oct. 31, 2016), available at
https://www.ftc.gov/news-
events/press-releases/2016/10/ftc-wins-summary-judgment-against-buffalo-ny-based-abusive-
debt
.
141
FTC v. Federal Check Processing, Inc., No. 1:14-cv-00122 (W.D.N.Y Mar. 25, 2014) (Complaint), see also Press
Release, At FTC’s Request, Court Halts Debt Collector’s Allegedly Deceptive and Abusive Practices, Freezes Assets
(Sept. 23, 2014), available at
http://www.ftc.gov/news-events/press-releases/2014/03/ftcs-request-
court-halts-debt-collectors-allegedly-deceptive
.
142
United States v. Commercial Recovery Sys., Inc., No. 4:15-cv-36 (E.D. Tex. Apr. 7, 2016) (Memorandum Opinion
and Order).
143
United States v. Commercial Recovery Sys., Inc., No. 4:15-cv-36 (E.D. Tex. Apr. 18, 2016) (Order); see also Press
Release, FTC Action: Debt Collector Banned from Collection Business (Sept. 22, 2016), available at
https://www.ftc.gov/news-events/press-releases/2016/09/ftc-action-debt-collector-banned-
collection-business
.
144
United States v. Commercial Recovery Sys., Inc., No. 4:15-cv-36 (E.D. Tex. Sept. 21, 2016) (Order)