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From Antitrust Law Daily, May 5, 2014

FTC wins $23 million judgment, injunction against debt collectors’ engaging in financial-related services

By Edward L. Puzzo, J.D.

The federal district court in Riverside, California has entered a $23 million judgment and a permanent injunction against Rincon Management Services, and numerous other entities under which Rincon has done business (collectively Rincon), sought by the FTC for engaging in abusive and deceptive debt collection practices (FTC v. Rincon Management Services, LLC, May 2, 2014, Phillips, V.). This order follows the entry of a similar injunction and monetary judgment against Rincon principals Jason R. Begley and Wayne W. Lunsford on March 26, 2014, requiring them to surrender $3.3 million in assets.

Monetary judgment. A judgment of over $23 million was imposed on the defendants jointly and severally, to be deposited into a fund to be used for consumer redress and other equitable relief.

Injunction. The judgment permanently enjoins Rincon from engaging or assisting in any and all debt collection activities. The officers, agents, employees, and attorneys for Rincon and any of its business entities are enjoined from directly or indirectly advertising, marketing, promoting, offering for sale or selling any financial related product or service. The defendants are specifically enjoined from claiming to improve consumers' credit rating or history, from promoting savings from enrollment in debt relief services or a reduction in collection efforts, from claiming to provide consumers with legal representation, or from claiming guaranteed outcomes from the purchase of financial products.

The Rincon defendants are also barred from using or benefiting from customer information in their possession, including addresses, Social Security numbers, credit or banking information, and are directed to destroy this information.

The case is Civil Action No. EDCV 11-01623 VAP (SPx).

Attorneys: Maricela Segura for the FTC. John James Markham, II (Markham and Read) for Rincon Management Services LLC; Prime West Management Recovery LLC; Union Management Services LLC; National Filing Services LLC; City Investment Services LLC; and Global Filing Services LLC.

Companies: Rincon Management Services LLC; Prime West Management Recovery LLC; Union Management Services LLC; National Filing Services LLC; City Investment Services LLC; Global Filing Services LLC

MainStory: TopStory ConsumerProtection FederalTradeCommissionNews CaliforniaNews

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