Florida CA Hit with $3.4 Million Judgment

Florida Collection Agency Hit with $3.4 million FTC Judgment
January 29, 2008

A collection agency working on behalf of small businesses got into some big trouble with the FTC for representing itself to debtors as a law firm.
by Patrick Lunsford
insideARM.com
January 29, 2008

A collection agency operating in Florida and Georgia has been ordered by the Federal Trade Commission to cease all collection activities that run afoul of the Fair Debt Collection Practices Act (FDCPA) and pay a judgment of $3.4 million to settle all FTC charges.


The FTC said in a press release Monday that a firm doing business as Rawlins & Rivera, Inc. and Ryan & Reed, Inc., both of Florida and Georgia, “used misleading dunning letters and abusive telephone calls to falsely threaten that consumers would be sued, their property seized, and their wages garnished if they did not pay the money that the defendants said they owed.” But the larger violations involved collectors representing themselves as attorneys.


The FTC moved to cease the operations of Rawlins & Rivera in early 2007 (“FTC Moves to Shut Down Debt Collection Agency,” Feb. 5, 2007). At the time, the FTC said that the company’s agents were claiming to be attorneys and calling debtors and threatening legal action after “case reviews.” A Florida lawyer whose letterhead was used by the business was also named in the suit.


Rawlins collected debts for beauty schools, truck driving schools, bail bondsmen, fitness centers, and other small businesses.


The FTC reported it suspended much of the $3.4 million judgment because the firm is unable to pay it. But a FTC spokesman told insideARM that “if they were not honest about their financial condition when the order was signed, and additional money is found, they will be liable for the whole amount.” Some assets of the defendants’ will be sold to satisfy part of the judgment.


The spokesman also noted that Rawlins may continue to operate as a collection agency. The order permanently bars the firm from falsely representing the character, amount, or legal status of a consumer’s debt, that its collector is an attorney or represents an attorney, or that it will sue the consumer if she doesn’t pay the debt.

Attorneys representing Rawlins and its owners did not return calls.