Collection agencies, Rawlins & Rivera, Inc., Ryan & Reed, Inc. and their lawyer has been permanently prohibited from falsely representing the character, amount, or legal status of a consumer’s debt.  As well as, representing that their collector is a lawyer or represents a lawyer, or that if the consumer does not pay, the defendants can or will file a lawsuit against the consumer.

The Federal Trade Commission (FTC) explained that it named the defendants’ attorney as a defendant because he permitted the collection agencies to use his law firm’s letterhead in many of their collection letters.

The defendants consented to a judgment totaling $3.4 million without admitting that they violated the Fair Debt Collection Practices Act (FDCPA) or the FTC Act.

According to the FTC’s complaint, the collection agencies attempted to collect debts for beauty schools, truck driving schools, bail bondsmen, fitness centers, and other small businesses.

The FTC presented letters that were used to intimidate debtors,  these letters appeared to threaten consumers with legal action which was probably not intended to be taken.   Defendants’ early letters included a warning to   “Please Consult Your Attorney”.  Consumers who did not respond, received subsequent letters which asserted that it was the “FINAL NOTICE PRIOR TO LEGAL REFERRAL”.    Several of the letters entitled “Final Notice” stated that the consumer could avoid the legal action by paying immediately.

One of the deceiving form letters which had the lawyer’s signature warns consumers that :

“This notice precedes action that will begin shortly…. Unless we hear from you within the next 72 hours, we will take the necessary steps to initiate this action.”

Another collection lawyer letter entitled “Final Notice and Demand” asserted :

“This notice is sent for the purpose of making legal demand as required by law.  Unless payment is received in our office immediately, an attorney in your town may receive instructions to have Sheriff serve you a summons and complaint; secure judgment; obtain a levy and sell at public auction any or all personal property up to the amount of this claim, together with all interest, costs and disbursements of this action.”

Yet another letter sent from the  lawyer’s letterhead  warns :

“You have 24 hours to contact my office in order to change the chain of events that are about to take place. Govern yourself accordingly.”

The FTC also alleged that the collection agencies falsely threatened consumers during telephone calls as well as through collection letters.  The FTC alleged that in “numerous instances” :

“Defendants’ collectors threaten that defendants will have the consumer arrested, sue the consumer, garnish the consumer’s wages, and seize the property of the consumer or the consumer’s family unless defendants receive prompt payment. *** Defendant’s collectors make other oral representations to lead consumers to believe that legal action against the consumer has been taken or will be taken shortly.”

It is possible to sue a collection agency for threatening to file a collection lawsuit against a consumer collection agency could not or would not actually file suit.  If this has happened to you, document everything and contact California Consumer Protection Attorney, Todd M. Friedman for a free consultation.