Many companies featured on Money advertise with us. Opinions are our own, but compensation and
in-depth research determine where and how companies may appear. Learn more about how we make money.

By MoneyTips
August 3, 2015

Do you need a feel-good story about justice today? Of course you do – who doesn't? This one is particularly satisfying to anyone who has ever been wrongfully harassed by a debt collector seeking payment on an old debt.

Earlier this year, the Federal Trade Commission (FTC) reached a settlement with the former Asset Capital and Management Group, a California debt-collection group that violated both the Federal Trade Commission Act and the Fair Debt Collection Practices Act (FDCPA). As a result of the settlement, almost $4 million in refunds are being sent to more than 95,000 consumers that were harmed by the group's practices.

The $4 million comes from personal assets of the four defendants (Thai Han, Jim Tran Phelps, Keith Hua and James Novella), as well as assets frozen from Asset Capital and its network. According to the FTC press release, Asset Capital and Management used "a sprawling network of intertwined companies and dozens of fictitious names" in their efforts to recover debts they had purchased from various creditors.

Read next: How to Protect Yourself From the “Epidemic” of Sleazy Debt Collectors

The group used a series of belligerent and threatening tactics to attempt to recover the debts, all in violation of the above acts. The tactics included the following:

  • Notification Failures – The group did not notify consumers that the callers were attempting to collect a debt or that the consumer has a right to dispute the debt and seek verification of the debt.Debt collectors are required by the FDCPA to send written notification about the debt that includes the creditor name and the amount. If you ever receive a call from a debt collector without this information, demand they provide it and do not engage them any further until they do.
  • Making Threats/Posing as Process Servers – The group posed as process servers or employees of law offices and threatened consumers by claiming to be delivering papers related to a lawsuit, and in some cases threatened to arrest the consumer (which even a real process server does not have the power to do). Other threats included potential wage garnishment and property seizure (again, outside the authority of a real process server). All of these efforts were intended to get the consumer to pay a debt through fear or embarrassment. Debt collectors are allowed to contact you, but they are not allowed to harass you or impersonate officials.
  • Information Disclosure – The group also disclosed information about the debt to consumer's employers, family members and co-workers. By disclosing information about the debt to these non-relevant parties, the group violated Fair Credit laws. Debt collectors can contact third parties about your basic information – address, home phone number and place of employment – but not about the debt or its details. Not only did the settlement extract redress payments from the defendants, it also barred them from future debt-collecting activities and prohibited them from “misrepresenting any relevant fact in connection with promoting or selling credit repair, debt relief, mortgage assistance relief or lending services." In other words, the defendants are being kept out of similar industries where scam artists can thrive.

Unfortunately, while these particular scam artists have been stopped, there are still many others out there who are willing to prey on those who don't know their rights. Do not be one of those people – know your rights under the FDCPA and fight back against the scam artists. Report any illegal activities to the FTC and perhaps you can help stop others from being victimized in the future. Be a part of the next feel-good story.

Read next: Can a Debt Collector Come After Me If I Never Got a Bill?

More From MoneyTips: