FTC Fines Abusive Debt Collection Agency $1.1M, Shuts Down Operation

A series of California debt collection agencies have agreed to pay $1.1 million to settle federal allegations that they improperly bullied consumers to get them to pay overdue bills and deceived clients about fees. The settlement ends a case against Forensic Case Management Services Inc., its owner, David M. Hynes II, associated companies and those companies’ principals.  The companies did business under the names of Rumson, Bolling & Associates, and Commercial Receivables Acquisition Inc., and other names. A federal judge in Los Angeles found the defendants liable for $33.8 million. The defendants, however, had no more money to pay the full judgment, the Federal Trade Commission said Thursday.

The FTC’s complaint against three debt collection companies, their owner, David M. Hynes II, and the companies’ principals subjected consumers to abusive debt collection practices and deceived their small business clients.  Under the settlement, defendants will pay $700,000.  In a separate settlement, the FTC also obtained over $400,000 in judgments against three other  California companies that Hynes controlled, Vesper Collins, Ramillies, and Innsbruck, which were alleged to have received funds from the defendants’ activities.  The FTC’s Complaint alleged that the defendants used multiple illegal debt collection practices.  Among other things, the agency alleged that the defendants berated consumers with obscene and profane language, threatened them with physical harm, improperly disclosed consumers’ debts to their employers, co-workers, neighbors, and other third parties, and falsely threatened consumers with lawsuits, arrest, seizure of their property, or wage garnishment.  Several consumers reported that defendants even threatened to dig up the bodies of consumers’ deceased relatives for alleged non-payment of funeral bills.  Two others connected to the companies, James S. Hynes and Heather True, agreed to smaller judgments.

The FTC also alleged that the defendants deceived their small business clients that they were collecting on behalf of.  Using the slogan “no recovery, no fee,” the defendants promised that they would collect their clients’ past-due accounts on a contingency basis.  The FTC alleged that, in many cases, the defendants collected money for a client, then kept all of the money or more than they were entitled to keep.  In some cases, the defendants asked clients for additional fees, purportedly for legal expenses in filing a lawsuit that would “guarantee” the successful collection of a debt.  However, in many cases, the defendants failed to file the promised lawsuits and the clients never received any money in satisfaction of the debt.

These practices allegedly violated both the Fair Debt Collection Practices Act, which bars deceptive, abusive, and unfair debt collection practices, and the FTC Act, which more generally bars deceptive and unfair commercial practices.

Under the settlement, defendants David M. Hynes II, Lorena Quiroz-Hynes, Forensic Case Management Services, Inc. (doing business as Rumson, Bolling & Associates, FCMS, Inc., Commercial Recovery Solutions, Inc., and Commercial Investigations, Inc.), Specialized Recovery, Inc. (doing business as Joseph, Steven & Associates and Specialized Debt Recovery), and Commercial Receivables Acquisition, Inc. (doing business as Commercial Recovery Authority, Inc. and The Forwarding Company) agreed to a $33.8 million judgment, which will be suspended due to inability to pay after they turn over $700,000.  In addition, under the same settlement, defendants James S. Hynes and Heather True agreed to judgments of $43,822 and $233,973, respectively, which will be suspended due to their inability to pay. If it is determined that the financial information the defendants gave the FTC was untruthful, the full amount of the judgments will become due.

In a separate settlement, three companies that David Hynes controlled – Vesper Collins, LLC; Ramillies, LLC; and Innsbruck, LLC – agreed to turn over $403,487 to the FTC. The FTC named these companies as relief defendants, alleging that they did not participate in the defendants’ wrongdoing but still profited from it. In addition, the FTC has filed for a default judgment against another company owned and operated by Hynes, Kester Archwood, LLC.

If an abusive debt collector has contacted you, protect yourself by calling an attorney experienced in the Fair Debt Collection Practices Act (FDCPA).  You could be entitled to damages up to $1,000 or more, plus have the abusive debt collector pay for your attorney fees.  You can reach Paramount Law in Oklahoma at 918-200-9272.