A debt collection scam's victims get $4 million
About 95,000 consumers will be getting a total of nearly $4 million to reimburse them for their losses in a debt collection scam, the Federal Trade Commission said on Tuesday.
The FTC said Asset Capital Management Group purchased the debt from creditors and to collect from consumers it "extorted payments from them using false threats."
Among the underhanded tactics the company allegedly used were threatening debtors with arrest, disclosing the debts to employers and relatives, and saying they would seize their property. In addition, the FTC accused the company of numerous violations of the Fair Debt Collection Practices Act, including failing to disclose details of the debt they were collecting and not notifying consumers of their rights to have the debt verified and to be able dispute it.
Asset Capital Management resolved the charges last year with a $90 million settlement, most of which was suspended. The FTC froze the company's assets and required the individuals involved in the scheme to surrender their personal assets. Together, that amounted to the $4 million of refunds. Asset Capital Management was also banned from the debt collection industry.
Compensation works out to an average of about $42 per victim.
The FTC typically makes public announcements when checks are mailed to compensate consumer losses so victims know it is coming and don't mistake it for a scam. The administrator of the fund is Analytics Consulting, and checks must be deposited or cashed within 60 days of mailing.
FTC officials warn that any compensation offer purporting to be from the FTC that asks for either more information or money is a scam.