More Bullshit Debt Collectors Busted By Gov

Man I get so sick of asshole debt collectors who give professional debt collectors a bad name. Here we go again with another crop of Southern California fakers scaring consumers to extract money.

But you want to know the truth about why scammers operate like these jerks, because it scares money out of people. It works.

I just wish there was a way to make sure every consumer contacted by any debt collector read the following guide before freaking out:

But here is the scoop on the recent crop of Orange County, California scammers.

At the request of the Federal Trade Commission, a U.S. district court has halted a debt collection operation that allegedly extorted payments from consumers by using false threats of lawsuits and calculated campaigns to embarrass consumers by unlawfully communicating with family members, friends, and coworkers. The court order stops the illegal conduct, freezes the operation’s assets, and appoints a temporary receiver to take over the defendants’ business while the FTC moves forward with the case.

The lawsuit, part of the FTC’s continuing crackdown on scams that target consumers in financial distress, charged four individuals and seven companies. The FTC alleged that the defendants were part of an elaborate debt collection scheme operating from locations in Orange and Riverside counties in California, and that they used various business names including Western Performance Group, as well as fictitious names, which they changed frequently to avoid law enforcement scrutiny.

The FTC alleged that the defendants called consumers and their employers, colleagues, and family members posing as process servers or law office employees, and claimed they were seeking to deliver legal papers that purportedly related to a lawsuit. In some instances, the defendants threatened that consumers would be arrested if they did not respond to the calls. But the debt collectors were not process servers or law office employees, and the defendants did not file lawsuits against the consumers. The FTC charged that the defendants’ false and misleading claims violated the FTC Act and the Fair Debt Collection Practices Act. In addition, the FTC alleged that the defendants violated the Fair Debt Collection Practices Act by:

  • improperly contacting third parties about consumers’ debts;
  • failing to disclose the name of the company they represented, or the fact that they were attempting to collect a debt, during telephone calls to consumers; and
  • failing to notify consumers of their right to dispute and obtain verification of their debts.

The complaint names as defendants Thai Han; Jim Tran Phelps; Keith Hua; James Novella; One FC, LLC, also doing business as Western Performance Group and WPG; Credit MP, LLC, also doing business as AFGA, CMP, AFG & Associates, AF Group, Allied Financial Group, and Allied Guarantee Financial; Western Capital Group, Inc., also doing business as ERA, LMR, WCG, and WC Group; SJ Capitol LLC, also doing business as SCG; Green Fidelity Allegiance, Inc., also doing business as WRA; Asset and Capital Management Group; and Crown Funding Company, LLC. – Source

The Operation

Here is what the FTC alleges in the complaint about how the companies operated.

Defendants are third-party debt collectors that purchase portfolios of past-due consumer debt, primarily credit card debt, and collect payment on their own behalf from consumers nationwide.

Defendants attempt to collect debts by contacting consumers using instrumentalities of interstate commerce including telephones, United States mail, and electronic mail.

Defendants regularly use deception and false threats to extract money from consumers. In numerous instances, Defendants: (1) falsely represent to consumers that a lawsuit has been filed against them or will be filed imminently; (2) falsely represent or imply that Defendants or their collectors are process servers, or working with process servers, or employed by or working with lawyers; (3) falsely threaten consumers with arrest, imprisonment, property seizure, or wage garnishment; (4) communicate with third parties, including consumers’ employers and family members, for purposes other than obtaining location information about a consumer; and (5) fail to provide statutorily-required disclosures to consumers, including a disclosure explaining that consumers have the right to dispute and obtain verification of their alleged debts.

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Since at least 2009, Defendants have operated their debt collection enterprise through a conglomeration of entities, including more than a dozen debt collection companies, as well as domestic and foreign shell companies that receive payments from the enterprise. Operating from boiler room locations in Orange and Riverside counties, the Defendants have registered the enterprise’s debt collection companies to do business under numerous fictitious names consisting of three or four letters — ACMG, ERA, SCG, ERA, LMR, AFGA, CMP, and WPG among them — creating a virtual alphabet soup of business names and an elaborate corporate structure that has no apparent legitimate business rationale. As various collection entities have gained notoriety or been restrained under federal court order, Defendants have replaced them with new collection entities. The new entities engage in illegal debt collection practices that are indistinguishable from the illegal practices of the debt collection companies that preceded them.

Defendants’ Misrepresentations to Consumers

Defendants’ collection scheme is predicated on convincing consumers that a debt collection lawsuit has been, or will soon be, filed against them and will result in dire consequences unless the consumer pays Defendants promptly.

In fact, in numerous instances, no lawsuit has been filed nor will soon be filed against the consumers. Rather, Defendants misrepresent the legal status of consumers’ purported debts as the subject of pending lawsuits to intimidate consumers into paying them.

In furtherance of the scheme, Defendants often use a two-step collection process to lend credence to the central misrepresentation that legal action against a consumer has begun or is imminent.

In the first step, Defendants’ collectors generally call consumers or consumers’ employers, family members, or other third parties and represent that they are process servers, or are working with process servers, and are seeking to serve the consumer with legal papers pertaining to a lawsuit against the consumer.

Often, Defendants’ collectors add a sense of urgency to their call by asserting that they are seeking to confirm that the consumer will be available to receive personal service at a certain time and location. In numerous instances, the collectors claim that the consumer must call another number to obtain any information about the lawsuit, then provide a callback number and a “case” number for the consumer to reference when calling. In numerous instances, Defendants’ collectors warn that if the consumer does not call within a limited time period, generally two or three hours, he or she will be personally served with process to appear in court. Often, the collectors warn that the police or local sheriff will serve the consumer at the consumer’s workplace.

In numerous instances, in placing these initial calls to consumers or third parties, Defendants’ collectors do not state their name and capacity, and do not disclose enough information so as not to mislead the recipient as to the purpose of their call.

In numerous instances, in their initial communications with consumers, Defendants’ collectors do not disclose that they are debt collectors attempting to collect a debt and that any information they obtain will be used for that purpose.

In truth and in fact, Defendants do not employ or contract with process servers to contact consumers or third parties, there is no lawsuit pending against the consumer, and neither a process server, the police, nor a sheriff is about the serve the consumer with legal process.

The second step of Defendants’ collection process generally occurs when a consumer calls the number that Defendants’ collectors provide in the initial call and is connected with a collector whose job is to secure the consumer’s payment for Defendants.

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In numerous instances, the collectors who answer the consumers’ calls falsely represent that they are with a law office or litigation department that is handling a lawsuit against the consumer. Even when Defendants’ collectors disclose that the consumer is reaching a debt collector, in numerous instances they falsely assert that there is a pending lawsuit against the consumer. On these calls, Defendants’ collectors generally state that the case involves a debt that the consumer owes. Defendants’ collectors make additional representations to falsely imply that legal action has been taken or will be taken shortly against the consumer because of non-payment of the debt. In numerous instances, Defendants’ collectors advise consumers that they can “settle” the action for an immediate payment of the entire debt, or offer consumers a payment plan. Generally, Defendants’ collectors instruct the consumer that payment should be made over the telephone via his or her credit or debit card.

In numerous instances, Defendants’ collectors threaten that if the consumer does not resolve the debt immediately, Defendants will have the consumer arrested, or jailed, or will garnish the consumer’s wages and/or seize the consumer’s property.

In truth and in fact, when Defendants’ collectors threaten consumers with legal action, in numerous instances, no legal action has been taken against the consumer and Defendants do not intend to take any such legal action. In addition, Defendants cannot have a consumer arrested for non-payment of a private debt, and, in numerous instances, cannot have a consumer’s wages garnished or property seized because they have not filed an action and obtained a judgment against the consumer.

In numerous instances, Defendants’ collectors also communicate, or threaten to communicate, with consumers’ employers, family members, or other third parties to apply pressure and create a sense of urgency on the part of the consumer so the consumer will pay the alleged debt to resolve the matter.

In numerous instances, when Defendants communicate, or threaten to communicate, with consumers’ employers, family members, or other third parties, Defendants already possess contact information for the consumer including the consumer’s place of abode, telephone number, or place of employment.

In numerous instances, when Defendants’ collectors communicate with a third party in connection with the collection of a consumer’s purported debt, Defendants’ collectors disclose the consumer’s purported debt to the third party.

In numerous instances, Defendants do not, within five days of their initial communication with a consumer, provide the consumer with a written notice containing the amount of the debt and the name of the creditor, along with a statement that the collector will assume the debt to be valid unless the consumer disputes the debt within 30 days, as well as a statement that the debt collector will send a verification of the debt or a copy of the judgment if the consumer timely disputes the debt in writing. – Source


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Damon Day - Pro Debt Coach

Damon Day - Pro Debt Coach
Steve Rhode

2 thoughts on “More Bullshit Debt Collectors Busted By Gov”

  1. I know this an old thread but does anyone know exactly who I need to contact to get this debt off my credit report? The original company sold the closed account to a collection agency, who then sold it to another and another until it finally reached Crown funding. I never paid anyone on this account but at this point I need it off of my account and have no one to contact… Thanks for any help you can give!

  2. I understand exactly where you are coming from on harsh tactics…but here is a point to ponder…why are collection agencies turning to these drastic measures? The answer is simple…there are no laws to protect these lending institutions from predator borrowers…that’s right I said it! I am not talking about your average person who tok out some credit had a turn of events in life and then couldn’t afford these cards…I am talking about the ones who make it a business running up debt waiting seven years and running up more debt…with a bankruptcy every ten years…what about these people? They have heard everything every debt collector has told them and their intentions are the same…to charge money they have no intention of every paying back! The reason debt collection has switched over to these harsh tactics is people don’t have the same MORAL values that they had ten plus years ago…they feel they are ENTITLED to not pay back money that they received goods and services for!

    People know they do not have to pay back anything…and if they don’t know they look it up on google…so the question is…is debt collections a dying profession? What about the economy? With all this money not being paid back…and every part of the government working against debt collection efforts…where does this negative go? People are all up in arms that the banks needed bailing out…but they want to protect predatory borrowing…the harder you smack down debt collections the more money these banks will need…you just don’t take out money and get goods and services for free…someone is paying somewhere…so how do debt collectors make an honest living? It’s very simple…we make stricter laws for borrowers…not the collection industry…if a debt collector could call a consumer and say Obama passed a new bill that we can garnish wages/put you in jail/or something DRASTIC then they wouldn’t have to be so harsh with consumers…the government was right the laws need to change but it needs to change in line with putting the money back into the economy and protecting the money and the economy…people would pay their bills if there were laws protecting lenders and bill collectors would take the higher road if it wasn’t so easy for people to not pay!


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