Feds Score Temporary Shutdown Of Debt Collection Outfit Over Alleged Use Of Imprisonment Threats, Assertions That Minor Kids Would Be Taken Into Gov't Custody, Etc. To Collect On Payday Loans

The Federal Trade Commission recently announced:

• At the request of the Federal Trade Commission, a U.S. district court shut down a Houston-based debt collection operation that allegedly illegally used insults, lies, and false threats to collect on payday loans – including telling a Virginia woman that she would be arrested and jailed for three years, and would lose her disability payments if she did not pay a $980 debt.
  
  The court also froze the operation's assets, banned the defendants from engaging in debt collection, and appointed a receiver to take control of the business while the FTC moves forward with the case.
  
  In addition to using false threats of arrest and imprisonment, the operation allegedly told some consumers their minor children would be taken into government custody; disclosed debts to family members and military superiors; falsely claimed to work hand-in-hand with local sheriff’s offices; and collected bogus late fees and attorneys’ fees, the FTC complaint alleged.
  
  As part of its continuing crackdown on scams that target consumers in financial distress, the FTC filed a complaint against Goldman Schwartz, Inc., three affiliated companies, and three individuals who own or manage them. The operation did business nationwide collecting debts for numerous payday loan companies, including Ace Cash Express, Advance America, Allied Cash Advance, Checkmate, First Cash Advance, and MoneyMart.

For the FTC press release and links to the court filings, see FTC Action Leads to Shutdown of Texas-based Debt Collector that Allegedly Used Deception, Insults, and False Threats Against Consumers.