Debt Collector Can't Pay $4 Million Fine, but Can Stay in Business

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person hold an empty wallet
Nikola Bilic/Shutterstock

By Christine DiGangi

The Federal Trade Commission has ordered a Houston debt collector to pay a $4 million penalty for allegedly using false and deceptive collection practices that cost consumers more than $1.3 million in unfair fees. And the company can't pay.

So what happens when the debt collector can't pay its own debts? According to the ruling, RTB Enterprises (which also operates as Allied Data Corp.) and its owner, Raymond T. Blair, must forfeit assets totaling $100,000 to partially suspend the judgment. Blair would be ordered pay the full $4 million if he failed to turn over his assets, which include a luxury mobile home.

The Cost of Unlawful Collections

It seems like a small price for a company that is said to have sucked $1.3 million from debtors by claiming transaction and convenience fees were inevitable, in addition to falsely claiming to speak for attorneys who would sue debtors if they didn't pay. The FTC also alleges collectors deceived consumers to acquire their personal information.

Apparently, collectors were trained to tell consumers that payments weren't accepted if sent by mail, so they couldn't avoid the fees associated with taking payments by phone. In some cases, the fees were added to consumers' accounts without their knowledge, the complaint says. Perhaps most striking about this order from the FTC: The company will be allowed to continue its operations, as long as it ends its illegal practices and complies with the judgment suspension.

Mark Schiffman, vice president of the collection association ACA International, said via email he couldn't comment on specifics of the litigation, but a collector's capacity to stay in business following such severe accusations relies on a few requirements going forward: the ability to retain clients, get proper licensing in its state and get business insurance and bonding required by state law. "We don't condone bad behavior and feel strongly that businesses caught breaking the law should be held accountable," he said.

How to Handle Debt Collectors

Dealing with a collection account can be stressful, so consumers need to know their rights. Debt collectors are not allowed to lie to consumers (which is what seems to have happened in this case).

Paying a collection account doesn't remove the negative trade line from your credit report, but it should prevent the debt from changing hands and potentially causing you more financial stress. A collection account will hurt your credit score temporarily. As the account ages off your report, it will have less of an impact on your credit standing, which you can track for free through Credit.com.


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36 Comments

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progressivehoax

Hensmoveon.orgpfeffer, what a simpleton.

July 08 2014 at 12:31 PM Report abuse -1 rate up rate down Reply
skcarcomed_02

Hsenfailure is a good little paid troll defending all his other screen names and rating comments down with all his other screen names. What a simpleton.

July 08 2014 at 7:39 AM Report abuse +2 rate up rate down Reply
skcarcomed_02

hsenpfeffer

Now now little flying koch monkey do as I told you and take ALL of your many stupid little fake screen names and go flitting back to your koch masters to kneel before them and tell them we do not need you here. Now begone little flying koch monkey, BEGONE!!

)))))))))))))))))))))))))))))))))))))))))))))))))))

Hsenfailure just can't shake his Koch(kock) obsession. How much does Arianna pay you to post about your Koch(kock) obsession?

July 08 2014 at 7:34 AM Report abuse +2 rate up rate down Reply
hsenpfeffer

Thank you Johny for bringing the discussion back to the article about the abusiveness of debt collection agencies instead of the distractions spread all over the comments by the paid trolls.

July 08 2014 at 12:34 AM Report abuse -1 rate up rate down Reply
johnny18350

I think as many problems there is with debt collectors, the whole industry should be deemed illegal. I believe any company that hands out the credit should be responsible for its collections. Once again a business geared twords taking peoples money and not earing it is givin a free pass to conduct business as usual.

July 07 2014 at 10:54 PM Report abuse +4 rate up rate down Reply
mrsperlosi

teabuster2

mrsperlosi

Glad to see that you finally realized that we liberals are as you call it wacko dear. Most people already know that darling.
==============================================
I don't know about liberals, but you are.


+++++++++++++++++++++++++++++++++


There is not much you do know dear. How unfortunate for you. Hopefully you will make it out preschool next year. I think after 6 tries you should be able to move onto kindergarten Somey.

July 07 2014 at 7:19 PM Report abuse -5 rate up rate down Reply
1 reply to mrsperlosi's comment
hsenpfeffer

ANOTHER fake screen name from the little flying koch monkey. My that is a lot of work for 2 cents a post, especially when you stupidly mis spell the name of the former house speaker because you got banned under another spelling. Now now little flying koch monkey do as I told you and take ALL of your many stupid little fake screen names and go flitting back to your koch masters to kneel before them and tell them we do not need you here. Now begone little flying koch monkey, BEGONE!!

July 08 2014 at 12:16 AM Report abuse rate up rate down Reply
1 reply to hsenpfeffer's comment
skcarcomed_02

LMAO it's the AOL screen name police. Hsenfailure!!!!! So how long have you had your Koch(Koch) obsession?

July 08 2014 at 7:36 AM Report abuse rate up rate down
mrsperlosi

I have to go now Somey. Do try and control your outrageous and outlandish behavior darling. I know that bad behavior comes naturally to us liberals Somey. How utterly sad for you dear.

July 07 2014 at 7:17 PM Report abuse -4 rate up rate down Reply
1 reply to mrsperlosi's comment
hsenpfeffer

I am happy that you agree that a person can exaggerate, lie and make up nonsense to pretend liberals are ridiculous but isn't it just amazing that nothing we can make up or imagine is as stupid, childish, pathetic, perverted, disgusting or half baked as what the CONservatives and republiCONs actually do. It is impossible to parody something so utterly stupid and ridiculous as the actual antics of the CcONservatives. They are their own punchline as I am certain you agree.

July 08 2014 at 1:05 AM Report abuse rate up rate down Reply
2 replies to hsenpfeffer's comment
hsenpfeffer

So little flying koch monkey, you STILL have not done as I commanded and flitted away to your koch masters. And you are still stupid enough to keep working far harder than your two cents a post justifies for your projectile vomiting of idiocy. NOW DO AS I COMMANDED YOU AND BEGONE LITTLE FLYING KOCH MONKEY, BEGONE!!!

July 08 2014 at 1:18 AM Report abuse +1 rate up rate down
skcarcomed_02

The only CON is the conartist known as Obama. You pathetic little tool.

July 08 2014 at 7:37 AM Report abuse +1 rate up rate down
mrsperlosi

teabuster2

mrsperlosi

Something else you and I have in common dear.
===========================================
I've got nothing in common with you, you lush.

++++++++++++++++++++++++++++++++++++++++

Denial, denial, denial. Do talk with your sponsor about that little problem you have dear.

July 07 2014 at 7:15 PM Report abuse -5 rate up rate down Reply
mrsperlosi

teabuster2

mrsperlosi

Oh my. You heard someone speaking? That hit on the head has you hearing voices again dear. Perhaps you should discuss that in your next therapy session darling.
=================================
You need therapy worse than I do.

+++++++++++++++++++++++++++++

I agree dear, most of us liberals do darling.

July 07 2014 at 7:08 PM Report abuse -4 rate up rate down Reply
mrsperlosi

teabuster2

You are the epitome of nonsense.

+++++++++++++++++++++++++++++++++++++

If that is true Somey then you and I share something in common dearest darling.

July 07 2014 at 7:03 PM Report abuse -3 rate up rate down Reply