David N. Kirkman
Task Force Alert Chair
Asst Attorney General
Consumer Protection
NC Department of
Justice
P.O. Box 629
Raleigh, NC 27602
919-716-6000

North Carolina Division of Aging and Adult Services

TO NC SENIOR CONSUMER FRAUD TASK FORCE MEMBERS

******Alert #281******

Members of the Task Force have been mentioning scams where callers falsely accuse seniors of owing a debt and then threaten them with arrest or violence if they do not send money. There have been some federal enforcement actions this month against defendants accused of such tactics. At the request of the Federal Trade Commission (FTC), a U.S. district court in California halted a debt collection operation that allegedly deceived and abused consumers – making bogus threats that consumers had been sued or could be arrested over debts they often did not owe. As part of its crackdown on scams that target consumers in financial distress, the FTC charged two individuals and seven companies in a Corona, California-based debt-collection operation doing business as Rincon Debt Management. The court order stops the illegal conduct, freezes the operation's assets, and appoints a temporary receiver to take over the defendants’ business while the FTC moves forward with the case. This action comes on the heels of a similar case filing by the FTC a few weeks ago in which it alleged that abusive “bill collectors” threatened violence against people and their pets over debts that in many cases were non-existent. A portion of the FTC’s press release describing that case is set forth below:

At FTC's Request, Court Orders Debt Collector to Stop Deceiving Clients and Abusing Consumers

At the request of the Federal Trade Commission, a U.S. district court has halted an operation that allegedly subjected consumers to abusive debt-collection practices and deceived the small-business clients for whom it collects. The order also freezes the operation's assets and appoints a permanent receiver to run it while the FTC moves forward with the case.

As part of its continuing crackdown on scams that target consumers in financial distress, the FTC filed a complaint against six individuals and three companies involved in a Van Nuys, California-based debt-collection operation doing business as Rumson, Bolling & Associates.

The FTC complaint charges that the defendants, in collecting debts on behalf of their clients:

• harassed and abused consumers by threatening physical harm and death to them and their pets, threatened to desecrate the bodies of deceased relatives, and used obscene and profane language;
• improperly revealed consumers' debts to third parties, such as the consumers' employers, co-workers, neighbors, and family members;
• falsely threatened consumers with lawsuits, arrest, seizure of their assets, or wage garnishment; and
• falsely claimed that consumers would be liable for legal fees incurred in the collection of the debt.

******End of Alert******

Date: October 26, 2011

David N. Kirkman
Task Force Alerts Chair
Assistant Attorney General
Consumer Protection Division
Office of Attorney General Roy Cooper
114 West Edenton Street
9001 Mail Processing Center
Raleigh, NC 27699-9001
Tel. 919-716-6000
Fax 919-716-6050

Consumer Fraud / Alerts

Federal Trade Commission Alerts
(Protecting America's Consumers)

Related links

The United States Postal Inspection Service - Watch