FTC Sues Collection Agencies Over Misleading Names, Other Abuses

The Federal Trade Commission has filed a lawsuit against a group of affiliated collection agencies and their owners over the use of words like “Federal” in their names and collectors directly stating or implying that the company had the power to arrest consumers.

In a lawsuit seeking injunctive relief in addition to penalties and restitution payments, the FTC said that Federal Check Processing Inc. and about a dozen related companies “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,” according to Courthouse News Service.

The FTC’s offices could not be reached Monday due to inclement weather shutdowns.

All of the businesses operate in the Buffalo, N.Y. area.

The lawsuit said that “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. In numerous instances, defendants have asserted that unless the consumer makes an immediate payment of hundreds of dollars, defendants will have the consumer arrested.”

The defendants named in the suit include 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.