Debt Collector's Tactics Would Make The Godfather Blush

The FTC has shut down a debt collection firm that allegedly used heavy-handed techniques—including threats of violence against debtors and even their pets—to collect. The small businesses that hired the collection firm that promised “no recovery, no fee” may now have to get in line to collect the money collected on their behalf by the collection agency. Next time, they’ll want to choose a collection agency more carefully.

Apparently the collection firm they had hired, Rumson, Bolling & Associates, didn’t know about the federal Fair Debt Collection Practices Act, or California’s Rosenthal Act—or perhaps just didn’t care. Not only did they apparently violate state and federal laws to collect debts, but then they decided to keep some of that money for themselves rather than paying the firms that hired them to collect on their behalf.

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The FTC’s complaint against the firm is as graphic as many crime novels, with the firm allegedly calling debtors “white trash,” “crackerhead,” “scumbag” and other names too graphic for me to print. The collectors also reportedly resorted to threats of violence. When a debtor couldn’t pay the balance due to a funeral home for her daughter’s funeral, the collector allegedly threatened to desecrate her daughter’s body, and kill the debtor’s dog—as well as the debtor herself. “Are you going to pay this bill right now…or am I going to have to kill you?” notes the complaint.

The collection agency allegedly called debtors repeatedly, and ignored letters from debtors telling them not to contact them again. (Consumers have the right to send a collector a letter instructing them not to contact them. After the collection agency receives the letter, it must not contact the debtor again except to notify them of legal action.)

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At the FTC’s request, a U.S. district court has halted the operation, frozen assets and appointed a permanent receiver to run it while the FTC moves forward with the case. The complaint names as defendants Forensic Case Management Services, Inc. (doing business as Rumson, Bolling & Associates, FCMS, Inc., Commercial Recovery Solutions, Inc., and Commercial Investigations, Inc.), Specialized Recovery, Inc. (doing business as Joseph, Steven & Associates and Specialized Debt Recovery), Commercial Receivables Acquisition, Inc. (doing business as Commercial Recovery Authority, Inc. and The Forwarding Company), David M. Hynes II, James Hynes, Kevin Medley, Heather True, Frank E. Lindstrom, Jr., and Lorena Quiroz-Hynes.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law.

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Image: Iain Watson, via Flickr.com