United States: FTC Joins With Federal, State And Local Authorities On Nationwide Debt Collection Enforcement Initiative

On November 4, 2015, a group of law enforcement authorities, led by the Federal Trade Commission (FTC or the Commission), announced Operation Collection Protection, a coordinated federal, state and local initiative aimed at illegal debt collection practices.1 The initiative is the latest indication that regulators at all levels are focused on debt collection law enforcement, and signals a period of increased scrutiny for collectors and their financial institution partners.2 Collectively, the partner agencies have brought more than 115 actions this year, including 34 federal cases and 86 state and local cases. Most notable are the individual criminal indictments announced as part of the initiative, which can be seen as part of a broader enforcement push for individual accountability in enforcement proceedings.3 According to the announcement, Operation Collection Protection is the first coordinated federal-state enforcement initiative targeting deceptive and abusive debt collection practices.4

Among the most common allegations in the announced actions were:

  • harassing phone calls;
  • false threats of litigation, arrest and wage garnishment;
  • knowingly attempting to collect so-called phantom debts (debts that consumers do not actually owe);
  • failing to give consumers legally required disclosures and notices, or to follow state and local licensing requirements;
  • impersonating attorneys or process servers;
  • unlawfully disclosing debts to, or harassing, third parties;
  • failing to identify as a debt collector; and
  • failing to notify consumers of their right to receive verification of the debts.

Partnering with the FTC in the initiative at the federal level are the Consumer Financial Protection Bureau (CFPB or the Bureau), the US Attorney's Office for the Southern District of New York, and the Consumer Protection Branch of the US Department of Justice. The attorneys general of 46 states5 and the District of Columbia are joined by a number of state regulatory agencies, including the New York State Department of Financial Services and the Massachusetts Division of Banks. Other participants in the initiative include the California State Bar, the Los Angeles County Department of Consumer and Business Affairs, and the New York City Department of Consumer Affairs.

Operation Collection Protection reflects broader political momentum to constrain participants in the debt collection market. The day after the FTC's announcement, Senators Cory Booker (D-NJ) and Mike Lee (R-UT) introduced the Stop Debt Collection Abuse Act of 2015, a sign of potentially bipartisan support for reform. The bill would eliminate the present Fair Debt Collection Practices Act (FDCPA) exemption for third-party collectors that collect on behalf of the federal government, and limit collection fees to 10% of the amount collected. It would also confirm that "debt buyers" are "debt collectors" for purposes of the FDCPA. Finally, the bill would require the Government Accountability Office (GAO) to conduct a study on third-party debt collectors who collect on behalf of debt owned by state and local governments. While the bill is bipartisan, it is too early to tell whether it will garner enough support to pass through both houses of Congress and be signed into law.


The FTC shares with the CFPB jurisdiction to enforce the FDCPA, and also has power to bring actions based on unfair or deceptive trade practices under Section 5 of the FTC Act.6 In addition to its FDCPA jurisdiction, the CFPB also has power to bring actions based on unfair, deceptive, or abusive acts or practices in connection with the offering or sale of a consumer financial product or service.7

This joint and overlapping jurisdiction has resulted in cooperation between the CFPB and the FTC. For example, Dodd-Frank requires the CFPB to report annually to Congress on the FDCPA, and the FTC submits a letter to CFPB Director Richard Cordray each year to ensure the FTC's work is included in the Bureau's report. The FTC and the CFPB also formalized their cooperation in the consumer protection area through a Memorandum of Understanding (MOU), signed in January 2012, and subsequently reauthorized. The purpose of the MOU was to coordinate and avoid duplication in law enforcement and regulatory efforts. Under the MOU, the agencies agreed to (among other things): (i) meet regularly to coordinate upcoming law enforcement activities; (ii) inform the other agency before initiating an investigation or bringing an enforcement action; (iii) consult on rulemaking and guidance initiatives; (iv) cooperate on consumer education efforts; and (v) share consumer complaints.

In addition to coordinating with one another, both the FTC and the CFPB have long partnered with state attorneys general on consumer protection initiatives. Since its inception, the CFPB has sought to work collaboratively with attorneys general to investigate and resolve consumer protection issues. Director Cordray delivers remarks annually to the National Association of Attorneys General (NAAG), during which he emphasizes the importance of coordinating efforts between the CFPB and state consumer protection agencies, noting which entity is best suited to handle a particular issue.

Operation Collection Protection

As part of the initiative, the FTC announced 30 new enforcement actions and highlighted that the partner agencies have together taken more than 115 actions against debt collectors in 2015. In announcing the initiative, the FTC published a list of recent federal debt collection actions,8 along with a list of actions by state and local enforcement bodies.9 Interestingly, these lists indicate that the Operation Collection Protection state partners took additional, non-public actions.10

While Operation Collection Protection is a natural extension of prior efforts at coordination by the FTC, CFPB, state attorneys general and other parties, the significance of the initiative for future enforcement activity is not yet clear. The announcement of Operation Collection Protection focused on past actions and instances of past coordination between the partners to the program. That said, at a minimum the industry should expect a continuation of the heightened activity and coordination levels that have been evident for a year or more.

On its website, the FTC has highlighted four key takeaways for the collections industry:11

  • Illegal debt collection practices are a front-and-center concern of the FTC. Since 2010, the FTC has sued more than 250 debt collectors and secured judgments of almost $350 million in contested and unconsented proceedings. Eighty-six companies and individuals have found themselves banned from the industry.
  • Violations can result in prison time. As part of Operation Collection Protection, 19 individuals face indictment, have pleaded guilty, or have been convicted of criminal charges.
  • Enforcement partners have created a united front against debt collection abuses. In 2014, consumers filed more than 280,000 complaints with federal agencies related to debt collection, and the announcement of Operation Collection Protection is just the beginning of the partnership.
  • Industry members have a role to play, too. The FTC has reached out to members of the debt collection industry to work collaboratively to stop questionable practices before they start.


Although it is unclear whether this initiative will mean a further uptick in enforcement activity beyond the surge in recent years, or more cooperation among enforcement authorities, it is clear that a number of government actors are renewing their focus on debt collection. At a minimum, Operation Collection Protection, paired with other initiatives in Congress and during the election season, will further increase focus on debt collection as an issue. Industry participants should expect still more political pressure, enforcement activity and press coverage of their practices. Institutions that have not recently reviewed their debt collection practices should do so, as expectations and risks are greater than in the past.


1. https://www.ftc.gov/news-events/press-releases/2015/11/ftc-federal-state-local-law-enforcement-partners-announce.

2. https://www.wilmerhale.com/pages/EventDetails.aspx?eventId=17179876857.

3. http://www.justice.gov/dag/file/769036/download.

4. https://www.ftc.gov/news-events/press-releases/2015/11/ftc-federal-state-local-law-enforcement-partners-announce?utm_source=govdelivery.

5. All but New Jersey, Michigan, Utah, and Wyoming.

6. 15 U.S.C. § 45.

7. 12 U.S.C. §§ 5531, 5536.

8. https://www.ftc.gov/system/files/attachments/press-releases/ftc-federal-state-local-law-enforcement-partners-announce-nationwide-crackdown-against-abusive-debt/151102ocp-fedactionlist.pdf.

9. https://www.ftc.gov/system/files/attachments/press-releases/ftc-federal-state-local-law-enforcement-partners-announce-nationwide-crackdown-against-abusive-debt/151104ocp-stateactionlist.pdf.

10. Id.

11. https://www.ftc.gov/news-events/blogs/business-blog/2015/11/operation-collection-protection-puts-heat-illegal-debt.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions