FTC Shuts Down Fake Debt Collection Agency

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At the request of the Federal Trade Commission, a U.S. District Court shut down a debt collection operation that allegedly extorted payments from consumers using false threats of lawsuits and calculated campaigns to embarrass consumers by illegally communicating with family members, friends and colleagues. The court order terminates the unlawful conduct, freezes the assets of the operation, and appoints a temporary receiver to take over the defendants’ business while the FTC pursues the case.

The lawsuit, part of the FTC’s ongoing crackdown on scams targeting financially distressed consumers, charged four people and seven companies. The FTC alleged that the the defendants were part of an elaborate system of debt collection operating from locations in Orange and Riverside counties in California, and that they used various trade names, including Western Performance Group, as well as fictitious names, which they changed frequently to avoid the scrutiny of law enforcement.

The FTC alleged that the defendants called consumers and their employers, co-workers and family members posing as processing agents or law firm employees, and claimed that they were seeking to turn over legal documents allegedly related to a lawsuit. In some cases, defendants threatened that consumers would be arrested if they did not respond to calls. But the debt collectors were not bailiffs or law firm employees, and the defendants did not sue the consumers.

The FTC asserted that the defendants’ false and misleading statements violated FTC law and the Fair Debt Collection Practices Act (FDCPA). Additionally, the FTC alleged that the defendants violated the Fair Debt Collection Practices Act by:

  • improperly contacting third parties about consumer debts;

  • not disclosing the name of the company they represented, or the fact that they were trying to collect a debt, when making phone calls to consumers; and

  • failure to inform consumers of their right to contest and obtain verification of their debts.

The Complaint Names Thai Han as Defendants; Jim Tran Phelps; Keith Hua; James Novella; One FC, LLC, also doing business as Western Performance Group and WPG; Credit MP, LLC, also doing business as AFGA, CMP, AFG & Associates, AF Group, Allied Financial Group and Allied Guarantee Financial; Western Capital Group, Inc., also doing business as ERA, LMR, WCG and WC Group; SJ Capitol LLC, also doing business as SCG; Green Fidelity Allegiance, Inc., also doing business as WRA; Asset and Capital Management Group; and Crown Funding Company, LLC.

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