A group of Southern California-based debt collection companies was shut down Thursday by a U.S. district court, based on accusations of "abusive" tactics that included threatening distressed consumers with phony lawsuits and arrests.
The group, operating under seven different business names in Riverside and Orange counties, allegedly had employees pose as law enforcement or lawyers, in order to coerce people into paying debts. According to the FTC's lawsuit, the group was also accused of "calculated campaigns to embarrass consumers" by illegally contacting their employers, friends and family in violation of federal debt-collection laws.
By order of the court, the business assets of the companies and four defendants were frozen, pending the FTC's ongoing investigation. The seven companies went by multiple names, including Asset & Capital Management Group Inc., Western Capital Group Inc., Green Fidelity Allegiance Inc., and Crown Funding Co.
The case is part of the FTC's ongoing crackdown on illegal tactics by debt collectors. Consumers who feel they've been targeted should file a complaint or call (877) FTC-HELP or (877) 382-4357.