Newsroom

October 23, 2014

FTC halts debt scam against Spanish-speaking consumers

The Federal Trade Commission says a U.S. district court in Miami has stopped a fraudulent phantom debt collection operation that collected at least $2 million using abusive and deceptive phone calls targeted at Spanish-speaking consumers.

The FTC says the defendants behind Centro Natural Corp. and Sumore LLC "cold-called consumers and threatened them with harsh consequences, such as arrest, legal actions and immigration status investigations, if they failed to make large payments on bogus debts." FTC said the defendants' callers also pressured consumers into paying for products they didn't want by telling them it would "settle" their debt.

The defendants ordered consumers to pay them hundreds of dollars to take care of their phantom debts, which typically ranged from $3,000 to $9,000. The defendants also called consumers whose names are listed on the Do Not Call Registry. They are charged with violating the FTC Act, the Fair Debt Collection Practices Act, the FTC's Telemarketing Sales Rule, and failing to pay for, and abide by, the Do Not Call Registry rules.

The FTC voted 5-0 to file the federal court complaint against the defendants.

Yesterday, the FTC and CFPB co-hosted an all-day roundtable discussion in Long Beach, Calif., on how debt collection practices and credit reporting issues affect Latino consumers.