Security & Fraud

FTC: Fraudsters Posed As Attorneys In Debt Collection Scheme

The Federal Trade Commission (FTC) is putting the kibosh on a debt collection operation’s illegal activity. The operation had been extorting money from consumers, who did not actually owe anything, by pretending to be lawyers and threatening victims with lawsuits or arrest if they didn’t pay up.

The FTC reported news that victims received phone calls stating that legal action had been filed against them, or soon would be, and that they should call in with the provided case number — phony, of course. Only after the victims called in the case number did anyone even mention that the original call had (allegedly) been from an attorney.

Separately, the defendants also posed as small businesses in a further fraudulent effort to collect fake debts. This activity likely caused harm to the reputations of legitimate small businesses, since the defendants used real business information as part of the ruse. Some businesses received angry calls about their supposed debt collection activities — the ones being carried out by the criminals.

Third and finally, the FTC alleges that the debt collection operation shared these so-called debts with third parties without first sending written notices to consumers detailing the amount owed and the creditor’s name. Consumers were not given an opportunity to dispute the debt.

The FTC, which promotes competition and works to protect and educate consumers, voted 2-0 in approval of the fraud complaint.

Hardco Holding Group LLC, S&H Financial Group Inc., Daryl M. Hall and Dequan M. Sicard have been charged with violating the FTC Act and the Fair Debt Collection Practice Act.

The U.S. District Court for the Middle District of Florida, Orlando Division, issued a temporary restraining order against the defendants on July 10, the commission reported, and the operation’s assets were frozen. The court will hold a proceeding to decide the case.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The September 2019 Mobile Order-Ahead Tracker, serves as a monthly framework for the space. It provides coverage of the most recent news and trends as well as a provider directory that highlights key players across the mobile order-ahead ecosystem.

 

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