Collection of Phantom Debts by NC Company Prompts Charges from FTC

the agency charged three defendants with taking money from consumers for fake debts they did not owe

Collection of Phantom Debts by NC Company Prompts Charges from FTC
Image: Pixabay
june 26, 2017

A North Carolina debt collection operation is in hot water with the Federal Trade Commission (FTC) due to deceptive conduct.

The agency has charged Anthony Swatsworth, ACDI Group LLC, and Solutions to Portfolios LLC with taking money from consumers for fake debts they did not owe.

According to the FTC, the defendants bought phony payday loan debts—loans supposedly made by "500FastCash"—from SQ Capital through a debt broker, and continued to collect on those debts even after learning the debts were fake and receiving a full refund for their purchase.

The action is part of the FTC's crackdown on "phantom" debt collection.

Almost immediately after ACDI started collecting on the loans, consumers complained and provided evidence that they had never taken out a 500FastCash loan. Other consumers complained that they did not have an outstanding balance.

When the defendants reported the complaints to the broker, the broker returned the defendants' money and told the defendants to stop collecting on the phony debts—et the defendants kept collecting from consumers for at least seven more months.

According to the FTC, since the debts SQ Capital sold were counterfeit, ACDI had no right to collect on them.

The defendants are charged with violating the FTC Act and the Fair Debt Collection Practices Act.