Many struggling consumers have been intimidated into paying their debts by collection companies posing as lawyers and other officials. The federal trade commission has stepped in to put a stop to illegal debt collection practices in California. A lawsuit has been filed against a group of debt collectors to stop creditor harassment.

A lawsuit filed by the federal trade commission claims that a group of collectors violated debt collection laws by intentionally humiliating debtors. The employees allegedly called up family, friends and places of employment. Reportedly, the companies used seven business aliases and pretended to be lawyers and law enforcement officers to scare people into paying their debts. Consumers maintained that they were also told they would be arrested or sued.

The company’s aliases were Crown Funding, Western Capital Group and Green Fidelity Allegiance. It also went by the name of Asset and Capital Management Group. During the Federal Trade Commission’s investigation, the court has ordered the company’s assets, along with several of the employee’s assets to be frozen. Consumers who have been victimized by a collection agency can call 877-FTC-HELP.

California consumers may find it helpful to be aware that there are suitable options available for debt relief, including companies who provide debt reduction programs. Consumers should take the time to research the company and their reputation before signing any contracts, however. While these options can greatly reduce the amount of debt, there are consumers who just simply cannot afford to pay more than a certain amount each month. Once a person’s debt is too much to handle, there may be other suitable options to stop creditor harassment. Usually, filing bankruptcy in California is quicker for most individuals and can lead to discharge of most debts and other financial obligations.

Source: The Sacramento Bee, “FTC shuts down S. California debt collectors for abusive tactics,” Claudia Buck, Aug. 1, 2013