California Federal Court Halts Allegedly Deceptive Debt Collection Practices By Blackrock Services

On February 27, the Federal Trade Commission (FTC) successfully obtained a temporary restraining order against Blackrock Services, Inc. and its associated entities and individuals. The court order aims to halt the defendants’ alleged deceptive and abusive debt collection practices.

The FTC’s complaint, filed on February 24, 2025, alleges that Blackrock Services, Inc., along with Liberty Credit Management, Inc., Civil Complaint Administration, Pacific Billing Solutions, Cornerstone Legal Group, LLC, and their operators engaged in a fraudulent scheme to deceive consumers into paying debts they did not owe. The defendants are accused of violating multiple federal statutes, including the FTC Act, the Fair Debt Collection Practices Act (FDCPA), the Gramm-Leach-Bliley Act (GLBA), and the FTC’s Trade Regulation Rule on Impersonation of Government and Businesses.

According to the FTC, the defendants sent letters to consumers falsely claiming that they owed money on small dollar loans. These letters threatened legal action, damage to credit scores, and other severe consequences if the purported debts were not paid. The defendants allegedly misrepresented themselves as law firms and used various fictitious business names to bolster their credibility.

Court’s Findings and Order

The court, after reviewing the FTC’s complaint, declarations, exhibits, and supporting memorandum, found good cause to believe that the defendants engaged in deceptive practices. The court’s findings highlighted several key points:

• False Representations: The defendants falsely claimed that consumers were delinquent on loans and had legal obligations to pay the defendants. They also misrepresented themselves as attorneys and law firms.
• Threats of Legal Action: The defendants threatened consumers with arrest, imprisonment, wage garnishment, and liens on property, despite having no authority or intention to take such actions.
• Credit Reporting Misrepresentations: The defendants falsely claimed that consumers’ debts had been reported to credit bureaus and that they could have these debts deleted upon payment.
• Deceptive Collection Practices: The defendants used false representations and deceptive means to collect or attempt to collect debts, failed to disclose their identity as debt collectors, and used business names other than their true names.

In light of these findings, the court issued a temporary restraining order with several critical provisions:

• Prohibition of Deceptive Practices: The defendants are restrained from making false representations about debts, threatening unlawful actions, and using deceptive means to collect debts.
• Asset Freeze: The defendants’ assets are frozen to prevent dissipation and ensure the possibility of effective final relief for consumers.
• Appointment of Receiver: A temporary receiver is appointed to take control of the defendants’ business operations and assets, ensuring that the business activities are closely monitored and controlled.
• Immediate Access to Business Premises: The FTC and the receiver are granted immediate access to the defendants’ business premises and records to preserve evidence and expedite discovery.
• Expedited Discovery: The FTC and the receiver are allowed to conduct expedited discovery to uncover the full extent of the defendants’ operations and assets.

The court has scheduled a preliminary injunction hearing for March 18, 2025, to determine whether the temporary restraining order should be extended and whether additional relief should be granted.