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FTC Bitch Slaps Debt Collection Operation Over Phantom Debts

By on September 23, 2014

Lately I seem to be getting a bunch of reader questions about debt collectors going after old debts. See this and this.

Well the Federal Trade Commission has just announced they have halted the abusive debt collection practices of an operation that used fictitious names and threatened consumers into paying debts they may not have owed.

I don’t even need my shocked face for that announcement. Finding fake or real collectors going after debts that are not collectible is what I like to call Tuesday.

Under settlements with the FTC and a default judgment by the court, Pinnacle Payment Services, LLC and its principals have been barred from debt collection activities and are subject to a $9,384,628 judgment, which has been suspended for most of the defendants, due their inability to pay. Which it seems the defendants are almost always unable to pay.

“The Fair Debt Collection Practices Act is designed to ensure that debt collectors do not use abusive tactics to coerce consumers into making payments,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “In this case, Pinnacle threatened many consumers by telling them their bank accounts would be closed, their wages garnished, they would face felony fraud charges, or they would be arrested if they failed to pay the phantom debts. This is unacceptable, and the Commission will act swiftly to stop such flagrant law violations.”

According to an FTC complaint filed in 2013, the Pinnacle defendants, operating out of Atlanta and Cleveland, used fictitious business names that implied an affiliation with a law firm or a law enforcement agency, such as Global Legal Services, Allied Litigation Group, and Dockets Liens & Seizures. Using robocalls and voice messages that threatened legal action and arrest unless consumers responded within a few days, the defendants collected millions of dollars in payment for phantom debts – debts many of the consumers contacted did not owe. Their illegal practices generated nearly 3,000 complaints to the FTC’s Consumer Sentinel database.

READ  Fake Payday Loan Collectors Halted by Court

Based on their alleged violations of the FTC Act and the FDCPA, on October 24, 2013, the U.S. District Court in Atlanta temporarily stopped the alleged illegal conduct, pending final resolution.

The settlements with the corporate defendants and individual defendants Dorian Wills, Lisa Jeter, Nichole Anderson, Hope Wilson, Demarra Massey, and Angela Triplett and the default judgment against Tobias Boyland ban the defendants from debt collection activities, including helping anyone else engage in debt collection or selling debts. They also are prohibited from making misrepresentations related to the provision of any financial products or services, and must destroy all consumer information they have on file.

The settlements with each defendant except Massey require them, jointly and severally, to pay judgments of $9,384,628, which represents the total consumer injury caused by their allegedly illegal conduct. The settlement with Massey includes a judgment of $1,558,657, which reflects the consumer injury caused during her tenure with the operation. Under the settlements, the monetary judgments against Jeter, Wilson, Anderson, Triplett, and Massey will be partially suspended due to their inability to pay. – Source

The sad part is this will not stop the practice of scaring consumers into paying debts they never owed or no longer owe. In fact many of these operations I’ve chased down are located overseas and just spoof the telephone numbers and pretend to be calling from the U.S. I have a lot of previous article on the fake debt collector scam.


If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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