[{"pubDate":"Wed, 07 Oct 2026 14:05:06 +0200","titre":"Setting the debt parking brake","url":"https://www.ftc.gov/business-guidance/blog/2020/11/setting-debt-parking-brake","source":"FTC USA Business Blog Posts","id":3201875,"description":"Setting the debt parking brake lfair November 30, 2020 | 12:14PM Setting the debt parking brake By Lesley Fair What are the biggest risks of parking? A dinged door? A bruised bumper? For consumers victimized by the pernicious practice of debt parking, the impact on their financial health can be devastating. And if you’re a debt collector who engages in debt parking, an FTC settlement with Midwest Recovery Systems suggests you could face law enforcement action for violations of the FTC Act, the Fair Debt Collection Practices Act, and the Fair Credit Reporting Act. Just what is debt parking? It’s the practice of placing purported debts on consumers’ credit reports without first attempting to communicate with the consumer about the debt. Some call it “passive debt collection,” but there’s nothing passive about the injury it can inflict. Consumers often don’t learn about it until a mortgage company, prospective employer, or other decision maker pulls their credit report and spots what appears to be an unpaid debt. With a house, car, or job in the balance, many people feel pressured to pay up – even though they may not actually owe the money. That’s the tactic the FTC says Missouri-based Midwest Recovery Systems and owners Brandon M. Tumber, Kenny W. Conway, and Joseph H. Smith engaged in. According to the lawsuit, since at least 2015, the defendants have reported to credit reporting agencies more than $98 million in bogus or highly questionable debts for payday loans, debts subject to unresolved fraud claims, debts in bankruptcy, debts in the process of being rebilled to consumers’ medical insurance, and even debts people had already paid. The FTC alleges the defendants continued to collect those debts even in the face of billowing red flags about their validity. In fact, when consumers were able to dispute the purported debts, the defendants have regularly concluded that between 80% and 97% of them were either inaccurate or invalid. That’s not surprising, given that many of those debts originated from certain payday lenders and others whom the FTC has sued for their own illegal practices. Here’s an example cited in the complaint of how the defendants used debt parking to help line their pockets with millions in gross revenue. When applying for a mortgage, a consumer was told that an outstanding medical debt of $1,500 had lowered his credit score, which threatened to put the kibosh on buying a house. He contacted the hospital where he supposedly owed the debt, only to be told that he owed just an $80 co-pay. In spite of that, the FTC says the defendants refused to remove the debt and threatened the consumer with a lawsuit if he didn’t pony up. His complaint was one of thousands that Midwest Recovery received. For people who work in the collections field, the pleading in this case merit a careful read. In addition to alleging the defendants made false or unsubstantiated representations in violation of the FTC Act and the Fair Debt Collection Practices Act , the complaint expressly challenges their debt parking tactics as an unfair practice under the FDCPA. The FTC says they also violated the FDCPA by failing to provide validation notices – one of the protections in the statute designed to ensure consumers have the information they need to dispute an invalid debt. Three other counts charge the defendants with violating the Fair Credit Reporting Act by furnishing information to credit reporting agencies they knew or had reasonable cause to believe was inaccurate, by failing to conduct reasonable investigations of disputes, and by failing to report the results of those investigations to consumers. The settlement suggests some takeaway tips for others in the collections ecosystem. Consumers’ credit reports are a NO PARKING zone. This is the first FTC case to address debt parking – and thus the first to challenge the practice as unfair under the FDCPA – but the message couldn’t be clearer. Debt collectors that park fake or"},{"description":"First FTC ROSCA case challenges bogus BOGO and \"free\" claims wfg-adm109 October 21, 2014 | 12:02PM First FTC ROSCA case challenges bogus BOGO and \"free\" claims By Lesley Fair It’s called ROSCA – the Restore Online Shoppers’ Confidence Act – and it prohibits marketers from charging consumers for an online transaction unless the marketer has clearly disclosed all material terms of the deal and received the consumer’s express informed consent. Your e-commerce clients will want to know about the FTC’s first ROSCA case , filed recently in Nevada. According to the lawsuit, Health Formulas, LLC and a tangle of related California- and Nevada-based companies and individuals – consumers may know them as Simple Pure Nutrition – pitched a variety of products for weight loss, muscle building, virility, and skin care. The defendants advertised diet supplements like Pure Green Coffee Bean Plus and RKG Extreme as a shortcut to drop the pounds: “Burn fat without diet or exercise,” “Extreme weight loss!” “Shed pounds fast!” “Super concentrated double fat burning,” etc. Among the defendants’ more colorful business names: Weight Loss Dojo, Longhorn Marketing (sorry, Texas fans), Black Bull, and Unleash the Thunder. But unsubstantiated weight loss claims were just the start. The FTC says the defendants lured people in with bogus promises of a “free” trial or deceptive buy-one-get-one (BOGO) offers. Then they tricked consumers into giving their credit or debit card information with the false implication that consumers had to “just pay shipping.”   Digits in hand, the defendants really went to town, allegedly signing consumers up without their authorization for a negative option program that billed their accounts over and over again, to the monthly tune of between $60 and $210. The FTC says the defendants violated ROSCA by using a negative option feature without providing clear and conspicuous disclosures, getting the consumer’s express informed consent, and offering a simple mechanism for stopping the recurring charges. The FTC’s complaint also cites the defendants’ hard-to-find and hard-to-understand fine-print “terms and conditions,” which consumers could reach only by scrolling through the equivalent of two printed pages and clicking on an obscure hyperlink. Assuming they found it – and that’s a big if – the typical “terms and conditions” document was 10 pages long. On some websites, consumers had to scroll down the payment page to see further fine-print disclosures about the cost of the products. The first sentence reiterated what consumers generally understood (“You must pay a shipping and handling fee of $4.95 for us to send you a full 30 day supply of Garcinia Cambogia Extract”) but it wasn’t until the middle of the paragraph that the defendants mentioned that the trial period lasts only 14 days, that it began when the items were shipped (not delivered), and that consumers would be charged after that. Other websites didn’t even include that information. According to the lawsuit, consumers who attempted to take the defendants up on their money-back guarantee were met with a series of undisclosed roadblocks. In addition to the ROSCA counts, the FTC says the defendants’ practices violated the Electronic Fund Transfer Act by debiting consumers’ accounts on a recurring basis without their prior written authorization. What’s more, the complaint charges that the defendants continued to call people after being told to cut it out, in violation of the Telemarketing Sales Rule’s entity-specific Do Not Call provisions. The FTC says they also violated the TSR through a series of deceptive upsells. A federal judge has entered a temporary restraining order and the FTC is seeking to put a permanent stop to the defendants’ illegal practices. If your clients have ROSCA questions, the","id":3201052,"source":"FTC USA Business Blog Posts","url":"https://www.ftc.gov/business-guidance/blog/2014/10/first-ftc-rosca-case-challenges-bogus-bogo-free-claims","titre":"First FTC ROSCA case challenges bogus BOGO and \"free\" claims","pubDate":"Wed, 07 Oct 2026 08:05:50 +0200"}]