A federal judge has ordered a Georgia company to cease operations and return its assets for allegedly harassing thousands of people into paying them millions of dollars for debts they did not owe. This is called phantom debt collection.

The Federal Trade Commission said in a federal court filing that the debt collector deceived consumers into paying more than $7.6 million in false debts by threatening them with prison time, in harassing their family members and taking other illegal actions.

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

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“Debt collectors should know that it is illegal to harass families and make empty threats of jail time,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “This action should send a clear message that illegal collection practices will lead to serious consequences. »

The complaint alleges that Kenneth Redon III, doing business under various corporate names, including Global Circulation, Consumer Impact Recovery, Total Consumer Solutions and Total Mediation Solutions, operated “a scheme to collect and process debt payments that consumers do not actually owe or which the defendants do not have the power to recover. Their system aims to convince consumers that a lawsuit or other legal action has been, or soon will be, filed against them and will result in disastrous consequences unless consumers promptly pay defendants that they do not actually owe.

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

“You have the right under the law to ask the appellant to produce written proof that you owe said debt,” Coyle said. Justin Gray, Channel 2 investigative reporter.

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

Judge Ross wrote in her order that “there is good reason to believe that, in many cases, Global Circulation “falsely represented that consumers were delinquent on their payday loans or other debts.”

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

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

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