A buyer of distressed debt and its law firm must repay $799,958 to debtors who were charged $18.95. This mandatory fee was charged for telephone payments, even though other types of payments did not incur the fee.
Security Credit Services LLC was accused by the Federal Trade Commission of deliberately misleading its debtors into believing that they had to pay a $18.95 fee to pay by phone. Many debtors paid the fee believing that it was mandatory.
An agreement with the FTC reveals that Security Credit Services agrees to refund all of those fees charged, a total of $799,958. This amount represents the total that the debt collector must provide in restitution to those who were charged. The firm is permanently prohibited from implying that debtors who wish to make a payment must pay the fee in order to make a payment.
Additionally, a law firm that Security Credit Services contracted out for collection activities has been ordered to cease all illicit threats of legal action. Jacob Law Firm PLLC had reportedly threatened certain clients with a judgment or other legal actions, even though it had no reasonable intentions to do so. These “empty” threats are a violation of the Fair Debt Collection Practices Act (FDCPA).
The FDCPA requires that a firm that threatens legal action must actually intend to do so if the debtors leaves no other option. In some cases, courts have ruled that a law firm failed to prove that it intended to pursue legal action based on a lack of prior legal action in similar cases.
The FTC did not reveal in depth the nature of the violations of Jacob Law Firm other than to bar the firm from making threats to sue if a debt is not repaid. This is usually an indication that the firm violated the FDCPA by making threats to sue when it had no intention of doing so. Such threats have been deemed intimidation and are illegal under federal law.
The settlement with the FTC does not prevent victims of intimidation by Jacob Law Firm from suing the debt collector. FDCPA violations are punishable by a $1,000 civil penalty for each instance. I have successfully collected money from a debt collector who harassed me for someone else’s debt, so you may certainly find that you have enough evidence to pursue your own FDCPA lawsuit.
Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.
Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.
In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.
Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!
Favorite quote:
"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."
Thomas Jefferson
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