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News The Division of Banks, the Federal Trade Commission and State and Federal Law Enforcement Partners Announce Nationwide Crackdown on Phantom and Abusive Debt Collection

9/29/2020
  • Division of Banks
DOB & Corrupt Collector heading

September 29, 2020

FTC, State, and Federal Law Enforcement Partners Announce Nationwide Crackdown on Phantom and Abusive Debt Collection

‘Operation Corrupt Collector’ targets debt collectors trying to collect on non-existent debts, using illegal scare tactics

The Massachusetts Division of Banks (Division), along with the Federal Trade Commission and more than 50 federal and state law enforcement partners, today announced a nationwide law enforcement and outreach initiative to protect consumers from phantom debt collection and abusive and threatening debt collection practices.

The initiative, called Operation Corrupt Collector, includes enforcement actions brought by the FTC, three federal partners, and partners from 16 different state agencies against debt collectors engaged in these illegal practices.

“For many years, we’ve been working with our law enforcement partners to crack down on illegal and abusive debt collectors,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “At a time when many are under financial stress, our coordinated actions today show that we’re continuing the fight against collectors who threaten people and try to collect debts they don’t owe.”

“Illegal debt collection is a significant problem harming many people in Massachusetts and across the nation,” Commissioner of Banks Mary L. Gallagher said. “We are committed to working cooperatively with the Federal Trade Commission, and others to address and eliminate abusive debt collection practices and will continue to partner with these organizations to protect consumers.”

The operation includes five cases filed by the FTC, two cases filed by the Consumer Financial Protection Bureau and three criminal cases brought by the U.S. Department of Justice and U.S. Postal Inspection Service. States reporting actions as part of the operation include Arizona, California, Colorado, Connecticut, Florida, Idaho, Illinois, Indiana, Massachusetts, New Mexico, North Carolina, North Dakota, New York, Ohio, South Carolina, and Washington.

In addition to law enforcement actions, state and local consumer protection agencies across the country are joining the FTC in rolling out new information to help consumers know their rights when it comes to debt collection and what steps to take if they receive a call trying to collect on a debt that they do not recognize. The FTC has also created a new online dashboard with information about reports received from consumers on debts not owed and abusive and threatening collection practices. So far in 2020, the FTC’s Consumer Sentinel Network has received more than 85,000 reports from consumers related to debt collection, and nearly 45 percent of those were related to debts the consumer did not owe or abusive and threatening practices.

In conjunction with this initiative, and through its investigations of consumer complaints, the Division issued four Cease Directives to debt collection firms located across the country for alleged unlicensed collection activity in the Commonwealth.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.

For Massachusetts consumers with questions concerning a debt collector, bank, credit union, mortgage lender, or other licensed entities, please visit the Division of Bank's website at www.mass.gov/dob. You may also contact the Division's Consumer Assistance Unit at (617) 956-1501 Monday-Friday 8:45 am to 5:00 pm.

CONTACT FOR CONSUMERS:
Consumer Response Center
877-382-4357

CONTACT FOR NEWS MEDIA:

Jay Mayfield

FTC Office of Public Affairs

202-326-2656

 

 

Division of Banks 

The Division of Banks (DOB) is the chartering authority and primary regulator for financial service providers in Massachusetts. DOB's primary mission is to ensure a sound, competitive, and accessible financial services environment throughout the Commonwealth.
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