WASHINGTON (7/2/14)--A U.S. District Court ruling has halted a Georgia-based operation from attempting to collect $3.5 million in phantom payday debts. The ruling was handed down at the request of the Federal Trade Commission (FTC), who charged that John Williams and two companies he controls used deception and threats to collect payday loan debts that consumers did not owe.
The FTC claims that Williams, a resident of Norcross, Ga.; Williams, Scott & Associates LLC; and WSA LLC falsely claimed to be affiliated with federal and state agents, investigators and members of a government fraud task force, as well as pretended to be a law firm. The defendants allegedly told consumers their drivers' licenses were going to be revoked, and that they were criminals facing imminent arrest and imprisonment.
In addition, the FTC alleges many consumers contacted by the defendants had previously submitted contact information while inquiring about a payday loan online, information that was later used by the defendants.
"Many consumers in this case were victimized twice," said Jessica Rich, director of the FTC's Bureau of Consumer Protection. "First when they inquired about payday loans online and their personal information was not properly safeguarded, and later, when they were harassed and intimidated by these defendants, to whom they didn't owe any money."
The FTC alleged that the defendants violated the Federal Trade Commission Act and the Fair Debt Collection Practices Act by telling consumers' family members, employers and co-workers about the debt; failing to identify themselves as debt collectors; using profanity; making repeated inconvenient or prohibited calls; failing to provide information in writing about the debt; and making unauthorized withdrawals from consumers' bank accounts.
The court had previously ordered the defendants' assets frozen to preserve the possibility that they could be used to provide redress to consumers, and appointed a receiver.