FTC Acts to Shut Down Unlawful Debt Collection Operation

A federal court has shut down an Atlanta-based debt collector in response to a Federal Trade Commission complaint alleging that its agents threatened consumers with arrest and imprisonment and tried to collect debts that consumers did not actually owe.

The FTC’s complaint alleges that Critical Resolution Mediation LLC’s collectors regularly posed as law enforcement officers, attorneys, mediators, or process servers when calling consumers, lending credence to their threats about supposed unpaid debts. In many cases, the defendants were attempting to collect on so-called “phantom” debt—debts that either were never owed—or debts that were no longer owed.

The case was brought as part of the Operation Corrupt Collector law enforcement sweep.

According to the complaint, the company’s collectors threatened not only to arrest and jail consumers who refused to pay immediately, but also to garnish consumers’ wages, revoke their drivers’ licenses, or lower their credit scores. In addition, the collectors allegedly contacted consumers at their workplaces or notified their families about the supposed debt, shared consumers’ personal information, and threatened serious legal consequences.

The collectors allegedly used profane language with consumers who refused to pay or asserted their right to review information about the purported debts. The defendants also refused to provide information about the alleged debts as required under the Fair Debt Collection Practices Act (FDCPA).

The complaint charges that Critical Resolution Mediation LLC, Parliament Services LLC, and Brian Charles McKenzie violated both the FTC Act and the FDCPA.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Northern District of Georgia. The Court entered a temporary restraining order in the case on Sept. 30, 2020.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.