WASHINGTON (6/26/14)--The Federal Trade Commission (FTC) filed a federal court order against a Houston-based debt collection company, prohibiting it from using allegedly deceptive tactics. RTB Enterprises, Inc., which does business as Allied Data Corp., and Raymond T. Blair, its president and sole shareholder, agreed to the order Wednesday. The FTC alleges the company used deceptive tactics to "bully English- and Spanish-speaking consumers into paying debts and unnecessary fees."
According to a complaint filed by the FTC, the defendants violated the FTC Act and the Fair Debt Collection Practices Act by collecting more than $1.3 million using false and deceptive methods. These fees were so-called "convenience fees" and "transaction fees" from consumers who authorized payments by telephone.
The defendants allegedly trained their collectors to deceive consumers into believing that payments were not accepted by U.S. mail and that the fees were unavoidable. In some instances, the fees were added to consumers' accounts without their knowledge or consent, the FTC alleges.
The FTC also charged that defendants' collectors deceived English- and Spanish-speaking consumers by falsely claiming to speak for attorneys, falsely threatening to sue consumers who did not pay and using schemes to coerce consumers into paying or providing their personal information.
"It's illegal for debt collectors to lie, make false threats, use a false identity, or trick people into paying a debt or an unauthorized fee," said Jessica Rich, director of the FTC's Bureau of Consumer Protection.
The federal court order imposes a penalty of $4 million. This will be partially suspended based on inability to pay once Blair surrenders assets totaling $100,000. The order also prohibits Blair and his company from repeating the deceptive practices alleged in the complaint, and requires them to disclose information about fees they charge and the steps consumers can take to avoid paying.
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