CCR World Magazine

USA - The Federal Trade Commission is sending $1.6 million in recovered funds to 24,916 consumers it said were scammed each for about $100 or more by phony debt collectors who harassed and threatened their victims.

They will start receiving checks this month.

The case dates back to 2003 when the FTC sued three companies, operating under the umbrella name, National Check Control. They were charged with harassing and abusing consumers; falsely threatening criminal prosecution; illegally communicating with third parties; collecting amounts that were not due; and other violations of federal laws.

Two years later, a judge ordered their operation shut down. The companies were also ordered to repay consumers they had bilked, the FTC said. The defendants – Check Investors; Check Enforcement; Jaredco; the companies’ owner, Barry Sussman; and their corporate counsel, Charles Hutchins – unsuccessfully appealed the case to the Third Circuit Court of Appeals and the Supreme Court, the FTC said.

A criminal case emerged after the appeals court refused to reconsider the civil case, the FTC explains.

“On February 7, 2008, one day after the appeals court refused to reconsider his appeal, Sussman removed from a bank safe deposit box coins valued at $335,000 that the federal court had ordered him to turn over to the FTC for consumer redress,” the federal agency said.

A federal jury convicted Sussman of two felony counts – theft of government property and obstruction of justice, the FTC said. In October, he was sentenced to 41 months in federal prison and is currently serving his sentence.

Last month, the FTC said it will review the practices of the nation’s top debt buyers, who often hire the debt collectors that are drawing complaints from consumers. Mistakes are being made by debt collectors who often “try to collect from the wrong consumers or the wrong amounts, or both,” the FTC said.

The agency has sent orders to nine companies that buy consumer debt seeking information about their practices.