Two men who worked for an allegedly abusive and deceptive debt collection operation will be banned from the business as part of settlements reached with the Federal Trade Commission.
The settlement orders against the two employees of the debt collection firm doing business as Rumson, Bolling & Associates are part of the FTC’s efforts against illegal debt collection practices. The two men, both of whom were managers in the operation, will surrender assets and are barred from misrepresenting any claim, including those related to providing debt relief, mortgage modification, and credit repair services to consumers. They also are barred from disclosing any consumer information they may have obtained, and are ordered to destroy it.
Frank E. Lindstrom, Jr. has agreed to a $673,000 judgment, representing the income he obtained from the operation since he began receiving a salary in 2005. This amount will be suspended except for $29,500, due to his inability to pay.
Kevin Medley has agreed to a $390,000 judgment, representing what he received from the operation operation since he began receiving a salary in 2005. This amount will be suspended due to his inability to pay, except for $17,500.
If the FTC finds that either defendant has misrepresented his assets, the full amount of his judgment will immediately become due.
At the FTC’s request last fall, a U.S. district court halted the activities of California-based Rumson, Bolling & Associates. The order froze the assets of the company, and appointed a receiver to run it. Lindstrom, Medley, and four other people, along with three companies, were charged with multiple violations of the FTC Act and the Fair Debt Collection Practices Act.
According to the complaint, the defendants harassed and abused consumers by threatening physical harm and death to them and their pets, threatening to desecrate the bodies of deceased relatives, and using obscene and profane language. The defendants also allegedly improperly revealed consumers’ debts to third parties, such as the consumers’ employers, co-workers, neighbors, and family members; falsely threatened consumers with lawsuits, arrest, seizure of their assets, or wage garnishment; and falsely claimed that consumers would be liable for legal fees incurred in the collection of the debt.
Using the slogan “no recovery, no fee,” the defendants allegedly deceived small businesses and other clients and potential clients by claiming that they would collect debts on contingency – charging a fee only when they successfully collected a debt, according to the FTC complaint. But often, the defendants collected money from consumers on a client’s behalf and then allegedly kept more than they were entitled to, sometimes keeping all the money for themselves, instead of forwarding what was owed to the client. At times, the defendants asked clients for additional fees, purportedly for legal expenses in filing a lawsuit that would “guarantee” the successful collection of a debt, the complaint stated. According to the complaint, many clients paid these fees, but the defendants often failed to file the promised lawsuits and the clients never received any money in satisfaction of the debt in question. – Source