FTC Targets Company in Major Debt Collection Scam Bust

"Federal Trade Commission sign on building facade."

Federal Trade Commission takes aim at Global Circulation, Inc. for alleged $7.6 million fraudulent debt collection scheme.

At a Glance

FTC files lawsuit against Global Circulation, Inc. (GCI) and owner Kenneth Redon III
Company accused of collecting over $7.6 million in non-existent debts
Federal court halts GCI’s operations and freezes assets
Illegal tactics included threats of jail time and harassment of family members
FTC continues efforts to protect consumers from abusive debt collection practices

FTC Cracks Down on Alleged Fraudulent Debt Collection Scheme

The Federal Trade Commission (FTC) has taken decisive action against Global Circulation, Inc. (GCI) and its owner, Kenneth Redon III, for allegedly orchestrating a massive fraudulent debt collection scheme. The company is accused of using illegal tactics to extract over $7.6 million from consumers for debts that were either non-existent or not legally collectible.

According to the FTC’s lawsuit, GCI employed a range of unlawful methods to coerce consumers into making payments. These tactics included threatening individuals with jail time and harassing their family members. The company allegedly operated under several fictitious names, such as Total Mediation Solutions, Total Consumer Solutions, and Consumer Impact Recovery, to carry out its deceptive practices.

FTC takes action against phantom debt collector that collected millions in bogus debt from consumers. Federal court temporarily halts operations while lawsuit proceeds: https://t.co/rC3z6ML10O

— FTC (@FTC) November 4, 2024

Legal Action and Immediate Consequences

In response to these allegations, a federal court has taken swift action to protect consumers. The court has temporarily halted GCI’s operations and ordered the company to turn over its assets to a court-appointed receiver. This move aims to prevent further harm to consumers while the legal case progresses.

“Debt collectors should know that harassing families and making empty threats of jail time is illegal” – Samuel Levine

Samuel Levine, a representative of the FTC, emphasized the severity of these actions and the agency’s commitment to protecting consumers from such predatory practices. The FTC’s intervention serves as a clear warning to other debt collection companies engaging in similar unlawful activities.

FTC’s Ongoing Efforts to Combat Abusive Debt Collection

The case against GCI is part of a broader FTC initiative to protect consumers from abusive and fraudulent debt collectors. In 2014 alone, the FTC filed 10 new debt collection cases against 56 defendants, the highest number in a single year. The agency has been actively working to shut down illegal operations and provide restitution to affected consumers.

“This action should send a clear message that illegal collection practices will come with heavy consequences.” – Samuel Levine

The FTC’s efforts have yielded significant results. In 2021, the agency refunded $4.86 million to victims of abusive debt collectors. Moreover, the FTC has banned 47 companies and individuals from working in debt collection due to serious law violations. These actions demonstrate the agency’s commitment to enforcing the Fair Debt Collection Practices Act (FDCPA) and protecting consumer rights.

Consumer Protection and Education

In addition to enforcement actions, the FTC has prioritized consumer education to help individuals recognize and respond to fraudulent debt collection practices. The agency has distributed 14.8 million printed publications on debt collection to educate consumers and businesses about their rights and responsibilities under the FDCPA and FTC Act.

Consumers are advised to be vigilant against fake debt collectors who may attempt to collect debts they don’t recognize or use threats to pressure them into paying. The FTC recommends requesting “validation information” to confirm if a debt is legitimate and sending a dispute letter within 30 days if the debt is not recognized.

As the FTC continues its fight against abusive debt collection practices, consumers are encouraged to report any suspicious or illegal collection activities to their state authorities. By working together, regulators and informed consumers can help combat fraudulent schemes and protect vulnerable individuals from financial exploitation.