At the request of the FTC, a U.S. District Court ordered Rincon Debt Management, a California-based company, to halt its debt collection operations. According to the FTC, Rincon made "bogus threats" telling consumers they had been sued or could be arrested over debts that they often didn't even owe. Employees of the collector also posed as attorneys, demanding consumers pay various nonexistent legal fees.
The FTC receives more consumer complaints about debt collectors than any other industry, including identity theft and fraud. Aside from the FTC's obvious interest in ensuring that debt collectors abide by the law, the agency is focused on the industry because of the important role it plays in consumers' everyday lives. Unfair or illegal debt collection practices can mean that "consumers often pay more than they owe, inadvertently waive their rights, have their privacy invaded, and get deeper into debt," the FTC says.
For example, debt collectors cannot contact you too early in the morning, or too late at night. Nor can they call you at work if you specifically tell them that your employer prohibits personal calls. You can require a debt collector to stop calling you and instead communicate strictly in writing. A debt collector must inform you, in writing, of exactly the size of the debt, to whom it is owed, and what you should do if you believe that you do not owe the debt. Additionally, debt collectors can't threaten you with violence, nor the possibility of arrest, nor any other legal action.
These are only some of the rights afforded consumers under the Act. To see a more extensive list, click here. To report an abusive debt collector, click here.
As for Rincon Debt Management, which allegedly earned almost $10 million through these illegal practices, the court order not only halts operations but also freezes the company's assets and appoints a temporary receiver to oversee the business while the FTC pursues its case.