FTC Wins Summary Judgment Action Against New York Based Debt Collector

In late October, a federal judge for the United States District Court for the Western District of New York granted summary judgment in an action taken by the FTC against a group of abusive debt collectors. The FTC commenced this action on February 24, 2014 pursuant to the Federal Trade Commission Act and Fair Debt Collection Practices Act. The FTC alleged that the debt collectors pretended to be affiliated with the government while attempting to collect debts from consumers, falsely accused consumers of committing check fraud, and threatened consumers with arrest

This action is a part of the continuing nationwide crackdown on collectors who engage in illegal tactics, otherwise known as Operation Collection Protection. In February 2014, the FTC charged Mark Briandi, William Moses, and 13 companies collectively known as Federal Check Processing in this action. The alleged scheme had been in operation since May of 2010. From 2010 to 2014, defendants portrayed themselves as government representatives and used company named that suggested government affiliation. These names included Federal Recoveries, LLC, Federal Check Processing, Inc, Federal Processing Services, Inc, Nationwide Check Processing, and State Check Processing Inc.

Consumers were threatened with consequences such as lawsuits, arrest, imprisonment, or seizure of assets unless they paid the alleged debts immediately. Additionally, the defendants repeated these threats and deceptive claims to consumers’ family members, friends, coworkers, and employers. Even when consumers asked for information about the alleged debts, they were routinely denied such information. The defendants also routinely refused to investigate the debt’s legitimacy, even after consumers explained that they did not owe the debt, the debt had been paid in full, or the defendants did not have the authority to collect on the debt.

In August 2015, the FTC moved for summary judgment pursuant to Federal Rule of Civil Procedure 56 on all counts against defendants. In April 2016, United States Magistrate Judge Michael J. Roemer recommended that the court grant the FTC’s request for summary judgement and that the defendants be banned from debt collection activities and making misrepresentations about financial products and services. Judge Roemer also recommended that the court impose a judgment of more than $10.8 million against the defendants. United States District Court Judge William M. Skretny adopted the Magistrate Court’s recommendation on August 12, 2016. The District court granted the FTC’s motion for summary judgment in its entirely and issued the final judgment and order on October 13, 2016.


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