WASHINGTON—The Federal Trade Commission is taking action against a Georgia-based debt collector that tricked consumers into paying more than $7.6 million in bogus debt by threatening them with jail time, harassing their family members, and other unlawful actions, the FTC said.
In response to a federal court complaint filed against Global Circulation, Inc. (GCI) and its owner, Kenneth Redon, III, the court agreed to temporarily halt the company’s operation and ordered it to turn its assets over to a court-appointed receiver, the FTC said.
“Debt collectors should know that harassing families and making empty threats of jail time is illegal,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “This action should send a clear message that illegal collection practices will come with heavy consequences.”
In its complaint, the FTC alleges that GCI and Redon contacted consumers under a number of fictitious company names, including Total Mediation Solutions, Total Consumer Solutions, and Consumer Impact Recovery.
“The company’s collectors call consumers out of the blue and threaten them with arrest, wage garnishment, and lawsuits if they don’t pay a supposed debt,” the FTC said.
According to the complaint, however, the debts GCI is attempting to collect either don’t exist at all or are not debts GCI can legally collect, the FTC explained.
Calls To Consumers ‘Incessant’
“The company’s calls to consumers can be incessant, with some receiving calls multiple times a day, leaving voicemails saying to call about an urgent legal matter. When consumers answer, they’re told that, unless they pay the bogus debts on that phone call using a credit or debit card, they’ll face legal peril,” the FTC said.
In other instances, according to the complaint, GCI calls consumers’ family members, making similar threats of legal action, and those calls have continued even after the company has been in contact with the consumer from whom they are seeking to collect the bogus debt.
“The company’s representatives regularly fail to identify themselves as debt collectors, which is required by the Fair Debt Collection Practices Act (FDCPA), and often have or claim to have sensitive personal information that they use to convince consumers that the demands for money are legitimate,” the FTC said.
According to the complaint, GCI’s deceptive statements and the urgency behind them have helped convince thousands of consumers to pay at least $7.6 million in bogus debts to the company.
The court’s temporary restraining order, issued on Oct. 29, freezes the defendants’ assets and puts the company under the control of a court-appointed receiver while the case continues, the FTC said.