From consumeraffairs.com:

The Federal Trade Commission has wrapped up a case that drew the largest civil penalty ever imposed on a debt collection business, for a total of $675,000.

In 2008, Academy Collection Service, Inc. and its owner, Keith Dickstein, paid $2.25 million to settle FTC charges that Academy collectors violated the FTC Act and the FDCPA while collecting debts, and that Dickstein failed to stop the violations. This latest settlement order imposes civil penalties of $375,000 and $300,000, respectively, on Albert S. Bastian and Keith L. Hurt III, who oversaw Academy's Las Vegas collection center.

The FTC settlement with the two remaining individual defendants, who allegedly misled, threatened, and harassed consumers; disclosed their debts to third parties; and deposited postdated checks early, in violation of federal law, requires each of these senior managers to pay a civil penalty and bars them from future violations.

The order bars Bastian and Hurt from making false, deceptive, or misleading representations in debt collection efforts, such as that nonpayment will result in garnishment of wages, seizure of property, or lawsuits, or that they or their agents are attorneys. They also are prohibited from withdrawing money from consumers' bank accounts without their express informed consent, and from depositing or threatening to deposit postdated checks before the date on the check. In addition, the pair are barred from improperly communicating with third parties about a debt; communicating with a consumer at any unusual time or place; and harassing, oppressing, or abusing any person in connection with debt collection.

"The FTC wants to remind debt collectors of their responsibilities and obligations under the law. Abusive collection actions are illegal, and if debt collectors use abusive tactics they could face legal action," said David Vladeck, Director of the FTC's Bureau of Consumer Protection. "At the same time, we want consumers to understand their rights if their debts go into collection. Money matters, and the more people know about managing their debt and dealing with debt collectors, the better off they will be."

The FTC's complaint claims the defendants participated in, or controlled, the actions of debt collectors whose unlawful practices included false or deceptive threats of garnishment, arrest, and legal action; improper calls to consumers; frequent, harassing, threatening, and abusive calls; and unfair and unauthorized withdrawals from consumers' bank accounts.

For example, Horacio of Santa Cruz, CA tells ConsumerAffairs.com com that he got a letter from the Academy Collection Service, "saying I owe $321.71 to First USA but I don't have an account with them so what's the deal?"

Joseph from Asbury Park, NJ says that shortly after having open-heart surgery he got a call from Cynthia from ACS regarding credit card debt. "I told her that I was under a doctor's care and could not discuss this, due to the added stress, until I was released by my doctor. She proceeded to press the matter and I hung up. She called again the following day and again ignored my request to be left alone." Joseph tell ConsumerAffairs.com that when he asked Cynthia for the name of the company she worked for, its address and telephone number, "she gave me her name, the company's name, an 800 number which was not the number she was calling from. She flatly refused to give me the address or location of the company she worked for."

The FTC complaint also maintained that the defendants failed to adequately investigate consumer complaints or discipline collectors, and collectors who were fired for violating the Fair Debt Collection Practices Act (FDCPA) often were rehired within a few months.

Academy is not the only collection agency accused of abusive practices. Consumer groups have been documenting abusive charges against these outfits for years.

To illustrate the extent of the problem, the FTC has released a video explaining consumer rights regarding debt collection.

Consumers with questions about their rights under the FDCPA should refer to Debt Collection FAQs: A Guide for Consumers at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm.