FTC Provides $5M in Refunds to Consumers Scammed by Collectors

The Federal Trade Commission provided $4.86 million in refunds to individuals who were victimized in debt collection scams last year, the regulator noted in a summary it sent to the Consumer Financial Protection Bureau regarding its enforcement of the Fair Debt Collection Practices Act.

The FTC took action against 17 defendants last year for allegedly violating the FDCPA and banned all 17 companies it said. But a Supreme Court ruling that was issued last year is making “it much more difficult” for the FTC to obtain financial relief in cases “involving unfair or deceptive debt collection practices that fall outside the scope of the FDCPA” and called on Congress to amend the Federal Trade Commission Act to restore its authority.

The information provided by the FTC was included in a report that the CFPB submitted to Congress related to oversight and enforcement of the FDCPA last year.

Similar to comments made by the CFPB in its report related to expanding the scope of the FDCPA to include protecting small businesses as well as consumers, the FTC noted in its summary of 2021 that it filed amended complaints in two enforcement actions that alleged unlawful collection practices were taken against small businesses.

In 2020, the FTC obtained $26 million in judgments against debt collectors, compared with $25 million in 2019. The FTC did not indicate the size of the judgments it obtained from debt collectors in its 2021 report.

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