Legal Library: Cases and Proceedings

At the request of the FTC, a federal court has temporarily halted a bogus credit repair scheme run by a sprawling network of 17 related companies and their principals. 

The FTC alleged that this company and its operators collected more than $12 million from consumers through illegal debt collection practices. The FTC’s complaint alleges that the defendants used robocalls to leave deceptive messages claiming consumers faced imminent legal action about debts. When consumers returned the calls, the defendants falsely claimed to be from a mediation or law firm, again threatened legal action, and used consumers’ personal information to convince consumers the threats were real. The complaint alleges that, in many instances, consumers did not owe the debt being collected on or the defendants had no right to collect it.

Under the terms of a settlement, National Landmark Logistics, LLC; National Landmark Service of United Recovery, LLC; Silverlake Landmark Recovery Group, LLC; and Jean Cellent will be permanently banned from debt collection of any kind. They will also be banned from buying or selling debt, and from making any misrepresentations to consumers about any goods or services—including from claiming that they are lawyers or represent a law firm.

In addition, the defendants will be required to surrender the contents of numerous bank and investment accounts, as well as the title to property located in Philadelphia and a Mercedes SL 550 or the cash value of those assets.

In December 2024, the FTC sent more than $540,000 in refunds to consumers who paid a group of abusive debt collectors who threatened consumers with lawsuits or arrest if they failed to pay debt that they might not have even owed.

In May 2020, the FTC sued the operators of a Pennsylvania-based telemarketing scheme, alleging that they charged organizations such as businesses, schools, fire and police departments, and non-profits for books and newsletter subscriptions they never ordered. The agency’s complaint also names the defendants behind a New York-based debt collection operation, alleging that they illegally threatened the organizations if they failed to pay for the unordered merchandise.

In April 2023, International Credit Recovery, Inc. (ICR), officer Richard Diorio, Jr., and manager Cynthia Powell, have agreed to a permanent ban from the debt collection industry after being charged with engaging in bogus debt collection efforts against businesses and non-profits.

In March 2024, the district court ruled against the FTC on its claims. In June 2024, the district court denied the FTC's post-trial motion to alter or amend judgment.

The FTC filed a complaint against RCG Advances, LLC—formerly known as Richmond Capital Group, LLC, and also doing business as Viceroy Capital Funding and Ram Capital Funding—and a related entity and individuals. The complaint alleges that, since at least 2015, the defendants have deceived small businesses and other organizations by misrepresenting the terms of merchant cash advances they provided, and then used unfair collection practices, including threatening physical violence, to compel consumers to pay. The FTC also alleges that defendants have made unauthorized withdrawals from consumers’ accounts.

RCG Advances, LLC and Robert Giardina are permanently banned from the merchant cash advance industry for deceiving and threatening small businesses and their owners. In addition, the court ordered RCG Advances and Giardina to make an upfront payment of $1.5 million and subsequent payment of more than $1.2 million to refund consumers.

Jonathan Braun, who controlled small-business funding company RCG Advances, will face a permanent ban from the merchant cash advance and debt collection industries. A federal court issued summary judgment in favor of the FTC in the case along with a permanent injunction against Braun.

As a result of a Federal Trade Commission lawsuit, a federal court has entered a judgment requiring merchant cash advance operator Jonathan Braun to pay $20.3 million in monetary relief and civil penalties.

The operators of a scheme that conned consumers into paying non-existent debts will be permanently banned from the debt collection business and from misleading consumers about debt in a settlement with the Federal Trade Commission.

The Federal Trade Commission is sending payments totaling more than $1 million to 1,966 consumers who were harmed by a debt collection scheme that conned consumers into paying debts they did not owe. The defendants used several names including GAFS Group, Global Mediation Group, and Mediation Services.

The Federal Trade Commission, working jointly with the U.S. Department of Justice, is mailing 1,179,803 refund checks totaling more than $505 million to people who were deceived by a massive payday lending scheme operated by AMG Services, Inc. and Scott A. Tucker.

The defendants behind a New York-based debt collection scheme will be permanently banned from the debt collection industry under a settlement with the Federal Trade Commission and the New York Attorney General, who alleged that the defendants bilked consumers out of millions of dollars by brokering and collecting on fake debts that people did not owe. In October, 2021 the FTC returned $772,512 to consumers who were targeted by the defendants.

In 2018, the FTC and State of New York alleged that Campbell Capital, LLC and its owner, Robert Heidenreich, along with a number of other related companies, collected payments on debts from consumers that exceeded the amounts they allegedly owed. The defendants in the case were able to collect these funds by allegedly using tactics such as threatening that consumers would be arrested or served with legal papers at work if they did not make payments immediately. In some cases, according to the suit filed by the FTC and New York, the collectors pretended to be sheriff’s office employees or process servers when making such threats in phone calls with consumers.

Heidenreich agreed to a settlement with the FTC and New York in February 2020 that permanently banned him from the debt collection industry and required him to turn over funds to be used to provide refunds to affected consumers. In total, $19,826.64 will be sent to consumers, with each receiving a check for $32.88.

The Federal Trade Commission and the Office of the Illinois Attorney General are sending payments totaling more than $4 million to more than 10,000 consumers who lost money to the Stark Law phantom debt collection scheme.

According a suit filed by the FTC and the Illinois Attorney General, Stark Law used a host of business names to target consumers who obtained or applied for payday or other short-term loans, pressuring them into paying debts they either did not owe or that the defendants had no authority to collect. The defendants allegedly called consumers and demanded immediate payment for supposedly delinquent loans, at times threatening consumers with lawsuits or arrest, falsely claiming they would be charged with “defrauding a financial institution” or “passing a bad check.”

The FTC alleged that this company and its operators collected more than $5.2 million from consumers through illegal debt collection practices. In its complaint, the FTC alleged that the company used the defendants in the National Landmark Logistics case to place deceptive robocalls alleging that consumers owed debt and faced legal action if they did not reply. Once consumers called the defendants after receiving the message, the defendants often falsely claimed to be representing a law firm or threatened consumers with arrest if they did not immediately pay the debt. 

Under the terms of their settlements, Lashone Elam (also known as Lashone Caldwell); Absolute Financial Services, LLC; Absolute Financial Services Recovery, LLC; AFSR Global Logistics, LLC; and Talesia Neely will be permanently banned from playing any role in debt collection.

They will also be prohibited from making certain misrepresentations to consumers, including whether a consumer owes them a payment, whether they are attorneys or associated with a law firm, or the terms of any refund program.

The Federal Trade Commission has taken action against a debt collection company that allegedly placed bogus or highly questionable debts onto consumers’ credit reports to coerce them to pay the debts. Under a settlement with the FTC, the company, Midwest Recovery Systems (Midwest Recovery), is prohibited from the practice, known as “debt parking,” and required to delete the debts it previously reported to credit reporting agencies. The FTC alleged that Midwest Recovery collected more than $24 million from consumers on such debts, largely by debt parking.

In November 2017, the Federal Trade Commission charged a Georgia-based debt collection business with tricking people into paying money for debts they did not owe. A federal court temporarily halted the scheme and froze its assets at the FTC’s request. In September 2018, the operators settled the FTC’s claims and are now banned from the debt collection business and from buying or selling debt. The FTC mailed refund checks in September 2019 totaling more than $516,000 to 3,977 consumers as part of the settlement.

10 Companies and 10 individuals settled Federal Trade Commission allegations that their deceptive and unfair tactics violated the FTC Act and the Fair Debt Collection Practice Act. The action is part of the FTC's continuing crackdown on all players involved in phantom debt schemes, including those who sell fake debt portfolios and those who harass consumers to collect the phony debt. 

The Federal Trade Commission is sending payments totaling more than $1 million to 1,966 consumers who were harmed by a debt collection scheme that conned consumers into paying debts they did not owe. The defendants used several names including GAFS Group, Global Mediation Group, and Mediation Services.