Business

5 Illegal Tactics Shady Debt Collectors Love

Published

9 years ago

February 27, 2015

Kyle Yeldell

The Federal Trade Commission building in Washington on Wednesday, Jan. 28, 2015. The nation's largest prepaid mobile provider, TracFone Wireless, will pay $40 million to settle government claims that it misled millions of smartphone customers with promises of unlimited data service. The FTC said that TracFone's advertising promised unlimited data, but the company then drastically slowed down consumers' data speeds, a practice known as throttling, when they had used a certain amount of data within a 30-day period. In some cases, the FTC said, the company cut off customers' data service when they ran over the limit. (AP Photo/Alex Brandon)

The Federal Trade Commission building in Washington on Wednesday, Jan. 28, 2015. (AP Photo/Alex Brandon)

(CBS News) – For a lot of debt collection companies, it’s hard to stay on the right side of the law. That’s because consumers have protections under federal law intended to stop debt collectors from using underhanded tactics to force payments to be made.

On Thursday, two New York-based debt collection firms that allegedly abused consumers were shut down by the Federal Trade Commission and the New York Attorney General’s Office.

“Today’s action should make it clear that nobody is above the law, and when shady debt collectors engage in illegal and abusive business practices, they will be held accountable,” New York AG Eric Schneiderman said in a statement.

The problem has gotten so bad that the FTC now publishes an ever-growing list of banned debt collectors that details what they were accused of to earn their dubious distinctions. In the past five years, the FTC filed lawsuits against 180 debt collectors and banned 63 of them, winning more than $220 million in judgments. In 2014 alone, the FTC filed charges against 56 debt collectors.

Post Views: 322