FTC Obtains Ex Parte Order Shutting Down Debt Collector

The Federal Trade Commission reported yesterday that on Feb. 24, it obtained an ex parte temporary restraining order from a New York federal court freezing the assets of Federal Check Processing, Inc. and related entities.  The TRO also appointed a temporary receiver for the defendants pending a hearing on March 17.

According to the FTC’s press release, the defendants used company names suggesting a government affiliation such as Federal Recoveries, LLC, Federal Check Processing, FTC LogoInc, Federal Processing Services, Inc., Nationwide Check Processing, and State Check Processing, Inc.  In addition to the allegedly deceptive names of the companies, the FTC alleges that the defendants threatened consumers with lawsuits, arrest and imprisonment or seizure of assets unless the debts were paid and failed to provide validation notices to consumers or respond to their requests for verification of the debts.

The TRO was based on 15 U.S.C. § 53(b) which permits the FTC to obtain a TRO whenever it has reason to believe that any person, partnership, or corporation is violating, or is about to violate, any provision of law enforced by the FTC.  The underlying complaint is based upon Section 5 of the FTC Act (15 U.S.C. § 45(a)) and Sections 803, 805 and 807 of the FDCPA (15 U.S.C. §§ 1692c, 1692e and 1692g).

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Tom Dominczyk is based in Maurice Wutscher's New Jersey office and supports the firm's matters in its New York and Pennsylvania offices, practicing in the firm's Commercial Litigation, Consumer Credit Litigation and Bankruptcy groups. Tom has successfully represented financial institutions and law firms throughout the country for claims filed under the Fair Debt Collection Practices Act, Fair Credit Reporting Act and various state consumer protection statutes. In addition to his litigation practice, Tom represents national, regional and local creditors in a variety of bankruptcy matters ranging from the defense of adversary actions to complex non-dischargeability litigation and preference defenses. He served as a Judicial Clerk to the Honorable Graham T. Ross, P.J.F.P., Superior Court of New Jersey, Somerset County.