A debt collection operation and the two people who were running it have been permanently banned from the industry as a result of a court order sought by the Federal Trade Commission and the Commonwealth of Pennsylvania after they were accused of making threats to people if they did not pay for merchandise they did not order.
A copy of the stipulated order for a permanent injunction against International Credit Recovery and Richard Diorio Jr. and Cynthia Powell can be accessed by clicking here.
The defendants were sued by the FTC and the Commonwealth back in 2020 as part of an enforcement action against a company that was secretly signing individuals up for subscriptions to publications, when the consumers thought they were signing up for no-risk trials. When the subscriptions weren’t paid for by the consumers, the accounts were forwarded to the defendants for collection. The collectors made false threats, such as telling individuals that their credit ratings would suffer if the debt was not repaid, or that they would be sued. The problem was that the agency — which received 99% of its revenue from this one account — did not furnish information to an credit bureau and never filed any lawsuits to recover unpaid debts.
Under the terms of the injunction, the defendants are permanently banned from working in the debt collection industry. International Credit Recovery has already ceased operating and Diorio and Powell are not working in the industry. The pair must also fully cooperate with the FTC and the Commonwealth by providing evidence and testimony.
“The defendants in the case were the second half of a one-two punch that targeted small businesses, non-profits and first responders, first with bogus subscription bills and then bogus debt collection,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, in a statement. “We’re proud to work with our partners in Pennsylvania to hold them accountable.”