On Dec. 5, 2017, the Federal Trade Commission reached a settlement with three defendants who it alleged partook in deceptive, abusive and unfair debt collection practices in violation of the Federal Trade Commission Act and the Fair Debt Collection Practices Act. Federal Trade Commission v. Hardco Holding Group LLC, 6:17-cv-01257 (M.D. Fla. Dec. 5, 2017).
In July, the FTC filed a complaint against defendants Hardco Holdings LLC, S&H Financial Group Inc., and Daryl Hall, alleging that they engaged in deceptive and abusive debt collection practices, including harassing consumers into paying debts not actually owed or that they had no authority to collect. The FTC alleges that, acting under various names to mislead consumers, including Alliance Law Group, the defendants contacted consumers and threatened them with imminent or pending legal action, including prison time, and claimed the police would come to their home and arrest them if they failed to repay their debt. In total, the complaint alleged two violations of the Federal Trade Commission Act and four violations of the Fair Debt Collection Practices Act. Id., Complaint at ¶ 28-44.
Under the terms of the settlement, defendants are banned from taking part in any debt collecting practices, including buying or selling consumer or commercial debt, or trading in consumer information. Additionally, the order imposes a financial penalty, prohibition from failing to dispose of consumers’ information properly, and compliance monitoring to ensure the terms of the settlement are followed.
As we have written in the past, this settlement is evidence of increased enforcement of dubious debt collection practices. In September, the Consumer Financial Protection Bureau took action against one of the largest holders of private student-loan debt, resulting in fines and penalties in excess of $21 million,[1] while in 2016 the CFPB and FTC levied more than $20 million in civil penalties and ordered more than $39 million in restitution, bringing or resolving more than 20 actions in total.[2] Given the CFPB’s uncertain future, the will of the FTC to enforce these actions is of increasing importance.
A copy of the settlement order can be found here.
[1] CFPB v. The National Collegiate Master Student Loan Trust, 1:17-cv-01323 (D. Del. Sept. 18, 2017).
[2] Consumer Financial Protection Bureau. Fair Debt Collection Practices Act: CFPB Annual Report (2017) at 34-40, available at https://consumerfinance.gov/f/documents/201703_cfpb_Fair-Debt-Collection-Practices-Act-Annual-Report.pdf.
