The Federal Trade Commission has sued a group of affiliated collection agencies and their owners for using the words "Federal," "American," "U.S.," or "State" in their names and for collection tactics such as threatening to arrest customers, CollectionsCreditRisk.com reported yesterday. Federal Check Processing Inc., of Amherst, N.Y., is the lead defendant. "Since at least May 2010, and continuing thereafter, defendants have used abusive, unfair, and deceptive tactics to pressure consumers into making payments on purported debts, often with respect to loans that the consumers have challenged in part or in whole,” according to the FTC’s lawsuit. “Defendants regularly have contacted consumers via repeated telephone calls and have threatened consumers with dire consequences — including arrest — if consumers fail to make immediate payments to the defendants.” The defendants have collected millions of dollars through misrepresentations, the FTC claims. In many cases, the defendants contacted consumers by telephone repeatedly and asserted that the consumer has committed check fraud or another criminal act.
