BUFFALO, N.Y. (CN) - Fifteen "abusive, unfair and deceptive" collectors have illegally taken millions of dollars from purported debtors, using the words "Federal," "US," "American" or "State" to imply or state "that they are affiliated with federal, state, or local government," the FTC claims in a federal lawsuit.
Federal Check Processing Inc., of Amherst, N.Y., is the lead defendant. All the other defendants save one claim to be from Amherst, Cheektowaga, Lockport or Niagara Falls, N.Y.
Individual defendant William Moses has been a principal of at least six of them, and defendant Mark Briandi of at least three of them, the FTC says.
Thirteen of the corporate defendants "have operated as a common enterprise while engaging in the deceptive and abusive acts and practices alleged," the FTC says.
Here is how the FTC described the "Defendants' Deceptive and Abusive Collection Practices" in the 18-page lawsuit: "Since at least May 2010, and continuing thereafter, defendants have used abusive, unfair, and deceptive tactics to pressure consumers into making payments on purported debts, often with respect to loans that the consumers have challenged in part or in whole. Defendants regularly have contacted consumers via repeated telephone calls and have threatened consumers with dire consequences - including arrest - if consumers fail to make immediate payments to the defendants. Defendants regularly have failed to identify themselves as debt collectors, have failed to provide consumers with basic information about themselves or the purported debt, and have failed to provide consumers with the information necessary, and required by law, to confirm or dispute the debt.
"Many consumers have paid the alleged debts that defendants have attempted to collect because they have been afraid of the threatened repercussions of failing to pay, because they have believed defendants are legitimate and are collecting delinquent debt, or because they have wanted to stop the harassment.
Since at least May 2010, defendants have collected and processed millions of dollars in payments for purported debts."
The defendants collected the millions through misrepresentations, the FTC claims: "In numerous instances, Defendants have contacted a consumer by telephone repeatedly and asserted that the consumer has committed check fraud or another criminal act. In numerous instances, Defendants have used corporate names including the words 'Federal,' 'US,' 'American,' or 'State.' In numerous instances, defendants have failed to identify themselves as debt collectors and have stated or implied that they are affiliated with federal, state, or local government. Innumerous instances, defendants have asserted that unless the consumer makes an immediate payment of hundreds of dollars, defendants will have the consumer arrested. ...
"In truth and in fact, defendants cannot have a consumer arrested for non-payment of a private debt. Moreover, the consumers have not committed check fraud or another criminal act related to the debt that could give rise to criminal sanctions, and the defendants have no affiliation with any government agencies."
And on and on it goes. The FTC accuses the defendants of violating the FTC Act, unlawful disclosures to third parties, misrepresentation, deceptive and abusive trade, "unsubstantiated representations that consumers owe debts," violations of the Fair Debt Collection Practices Act, prohibited communications with third parties, unjust enrichment, failure to provide a validation notice, and injury to consumers.
The FTC seeks disgorgements of ill-gotten gains, restitution, rescission or reformation of contracts, an injunction and penalties.
Here are the defendants: Federal Check Processing Inc.; Federal Recoveries LLC; Federal Processing Inc.; Federal Processing Services Inc.; United Check Processing Inc.; Central Check Processing Inc.; Central Processing Services Inc.; Nationwide Check Processing Inc. aka National Processing Services; American Check Processing Inc. aka American Check Processing Inc.; State Check Processing Inc.; Check Processing Inc.; US Check Processing Inc. aka US Check Processing Inc.; Flowing Streams F.S. Inc.; Mark Briandi, individually and as an officer of one or more of the corporate defendants; William Moses, individually and as an officer of one or more of the corporate defendants; and Empowered Racing LLC as a relief defendant.