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


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

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