Federal Judge Says Debt Collector Harassed Thousands To Pay Them Millions For Debts They Didn’t Owe

A federal judge has ordered that a Georgia company cease operations and turn over its assets for allegedly harassing thousands of people into paying them millions of dollars for debts they did not owe. It’s called phantom debt collection.

The Federal Trade Commission says in a filing in federal court that the debt collector tricked consumers into paying more than $7.6 million in bogus debt by threatening them with jail time, harassing their family members, and other unlawful actions.

District Judge Eleanor Ross agreed to a temporary restraining order halting the company’s operation and ordered it to turn its assets over to a court-appointed receiver.

“Debt collectors should know that harassing families and making empty threats of jail time is illegal,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This action should send a clear message that illegal collection practices will come with heavy consequences.”

The complaint alleges that Kenneth Redon III doing business under a variety of company names including Global Circulation, Consumer Impact Recovery, Total Consumer Solutions, and Total Mediation Solutions, ran “a scheme to collect and process payments for debts that consumers do not actually owe or that defendants do not have authority to collect. Their scheme is predicated on convincing consumers that a lawsuit or other legal action has been, or will soon be, filed against them and will result in dire consequences unless consumers pay defendants promptly that they do not actually owe.”

Georgia Watch Executive Director Liz Coyle says whether it is a phantom debt collector or any debt collector you as a consumer have legal protections.

“You have a right, under the law, to ask the caller to produce evidence in writing that you owe said debt, Coyle told Channel 2 Investigative Reporter Justin Gray.

According to the complaint, thousands of consumers have paid at least $7.6 million in bogus debts to the companies.

Judge Ross wrote in her order that “there is good cause to believe that in numerous instances” Global Circulation “falsely represented that consumers are delinquent on payday loans or other debts.”

Coyle says consumers should report any concerns about debt collectors to state authorities at the Attorney General and federal regulators at the FTC.

“Don’t fall for the pressure tactics because those very pressure tactics are a violation of the law,” Coyle said.