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WBK Industry News - Federal Regulatory Developments

FTC Bans Debt Collectors from Debt Collection Business

On August 26, the Federal Trade Commission (“FTC”) issued two consent orders banning National Client Services LLC d/b/a AFS Legal Services (“NCS”) and Unified Global Group, LLC (“Unified”) from all debt collection activities due to abusive and deceptive debt collection practices under the Federal Trade Commission Act and the Fair Debt Collection Practices Act.  The FTC also banned officers and managing members of the companies, Omar Smith, Ernest Smith, and Dominico D’Angelo. 

According to the FTC, NCS allegedly called consumers and demanded payment on payday loans even when consumers disputed the debt.  Furthermore, NCS allegedly impersonated police officers, threatened consumers, and accused individuals of bank fraud.

In a separate consent order, the FTC alleged that Unified threatened consumers, their families, and their employers in its efforts to collect payments. Moreover, Unified allegedly sent startling text messages to deceive consumers into contacting their office.

The order banned both NCS and Unified from all debt collection activities, and prohibited the companies from misrepresenting facts related to financial-related products. The order also fined NCS $4,479,152.00 and Unified $27,004,413.67, respectively.  However, Unified’s fine is partially suspended pursuant to Unified surrendering all frozen assets and D’Angelo, an individual defendant involved in Unified’s business, must pay $11,000. The order also requires Omar, a managing member and officer of NCS, to forfeit his Mercedes. 

In addition, pursuant to the order, Unified and NCS must provide the FTC with the following: (1) accounting records; (2) personnel records for each person providing services; (3) records of all consumer complaints and refund requests; and (4) a copy of each unique advertisement or other marketing material used by either NCS or Unified. NCS must collect such records for fifteen years, while Unified must do so for eighteen. 

The consent order, FTC v. Unified Group, LLC, is available at: https://www.ftc.gov/system/files/documents/cases/160907unifiedglobalgroupstip.pdf.

The consent order, FTC v. National Payment Processing, LLC is available at: https://www.ftc.gov/system/files/documents/cases/160907afsstip.pdf.