Phantom Debt Collectors Haunt Latinos, Are Busted by FTC
Harassing debt collectors seeking payment for “phantom debt” are becoming more common, says the FTC.
Thousands of Spanish-speaking consumers were targeted by debt collectors Centro Natural Corp. and Sumore LLC, who tricked them into paying over $2 million in phantom debts.
A “phantom debt” is any claim for payment which is too old to collect, was never owed to begin with, or which is unsupported by proof sufficient to establish its validity.
According to the Federal Trade Commission (FTC), the named companies unlawfully collected phantom debts since 2011 – perhaps longer – and used harassing and abusive techniques to get consumers to pay. Typically, they referenced debts of $3,000 to $9,000, then offered to “settle” for a lesser amount, often in the hundreds of dollars.
In an attempt to pressure their victims, Centro Natural Corp. and Sumore LLC allegedly cold-called Latinos, threatening legal action, arrest, and even immigration status investigations.
The two companies were further accused of getting consumers to purchase services that could “settle” their debt and were even said to pose as government officials, ignoring the National Do Not Call Registry while harassing consumers and occasionally using vulgar language when their demands were not immediately met.
According to the FTC, in cases where the debts were legitimate, Centro Natural Corp. and Sumore LLC would still violate the FDCPA (Fair Debt Collection Practices Act), the FTC Act, and the FTC’s Telemarketing Sales Rule.
It is unlawful for debt collectors to harass or to use profane or threatening language when calling anyone to collect a debt. It is also unlawful to mislead consumers by falsely identifying themselves or posing as government officials.
While the FTC was able to halt this unlawful operation, some or many of the same practices are used by “legitimate” debt collectors who fail to comply with their legal obligations of fairness, civility, and honesty towards consumers. The FDCPA applies to ALL debt collection activities and protects consumers with powerful tools to stop abuse, collect statutory damages from the collectors, and obtain payment of all attorney fees and costs a consumer’s lawyer expends to help the consumer.
If you received repeated, threatening, or harassing phone calls within the last 12 months for a “phantom debt” or any other debt, contact an experienced FDPCA consumer lawyer to put an end to debt collection calls for good.