AG Balderas joins national initiative to crackdown on debt collectors

New Mexico

A stack of $100 bills (Nexstar, file)

SANTA FE, N.M. (KRQE) – Attorney General Hector Balderas announced on Tuesday, Sept. 29 that he will be cracking down on debt collectors as part of a nationwide law enforcement initiative to help protect consumers from phantom debt collection as well as threatening and abusive debt collection practices. New Mexico is joining the Federal Trade Commission and over 50 federal and state law enforcement partners in the effort.

According to the New Mexico Office of the Attorney General, Operation Corrupt Collector includes enforcement actions brought by the FTC, three federal partners, as well as partners from 16 states against debt collectors who exhibit illegal practices.

“I will not tolerate any company coming into New Mexico that abuses and intimidates our families and consumers,” said Attorney General Balderas. “We always seek to protect New Mexico consumers and will hold abusive and unconscionable debt collectors accountable to the laws of New Mexico.”

The attorney general has filed three separate lawsuits in connection with this operation against debt collection companies: LVNV Funding, Central Mediation Services, and Capio Partners, LLC. The three lawsuits allege that the companies illegally convinced consumers into paying debts through fraudulent misrepresentations about the debts, and engaged in abusive and predatory practices.

The lawsuit alleges that in some instances, the companies forced consumers to pay debts they didn’t owe. The New Mexico Office of the Attorney General reports that the attorney general also sent a formal cease and desist demand to Ability Recovery Services.

In addition to these actions, state and local consumer protection agencies nationwide are collaborating with the FTC to roll out new information to help consumers know their rights when it comes to debt collection and what steps they should take if they receive a call to collect on a debt they don’t recognize.

The FTC has created a new online dashboard with information about reports it has received from consumers on debt not owed and abusive and threatening collection practices. The FTC’s Sentinel Network has received over 85,000 reports from consumers related to debt collection so far in 2020.

Nearly 45% of those reports were related to debts the consumer didn’t owe or were abusive and threatening practices. The operation includes five cases filed by the FTC, two filed by the Consumer Financial Protection Bureau, and three criminal cases brought by the U.S. Department of Justice and U.S. Postal Inspection Service.

The other states that are involved in the operation include Arizona, California, Colorado, Connecticut, Florida, Idaho, Illinois, Indiana, Massachusetts, North Carolina, North Dakota, New York, Ohio, South Carolina, and Washington.

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