Arizona obtains $1.6 million in restitution from debt collection operation
On May 10, the Arizona attorney general announced it filed a stipulated consent judgment in the Superior Court of Arizona against a defendant, the owner and manager of a debt collection operation. The AG’s original action was part of the FTC’s “Operation Corrupt Collection”—a nationwide enforcement and outreach effort established by the FTC, CFPB, and more than 50 federal and state law enforcement partners to target illegal debt collection practices (covered by InfoBytes here).
According to the AG’s press release announcing the consent judgment, the defendant’s debt collection operation allegedly called consumers and made false claims and threats to convince people to pay debts the operation had no authority to collect. The complaint contended that employees frequently used spoofing software to reinforce claims that they were law enforcement officers, government officials, process servers, and law firm personnel to intimidate consumers into paying the alleged debts, and told consumers to immediately respond or be held in contempt of court. Employees also allegedly threatened to file lawsuits, garnish wages and tax returns, place liens on homes and car titles, freeze bank accounts, send law enforcement to consumers’ homes and/or places of employment, and arrest consumers.
Under the terms of the consent judgment, the defendant is required to pay more than $1.6 million in consumer restitution and up to $900,000 in civil penalties, and is permanently enjoined, restrained and prohibited from participating in the debt collection industry. Court approval of the stipulated judgment is pending.