WASHINGTON, D.C. — The Federal Trade Commission (FTC) has announced decisive action against Global Circulation, Inc. (GCI) and its owner, Kenneth Redon III, over allegations of widespread fraudulent debt collection practices. The Commission has secured a proposed order that permanently bans the company and its owner from engaging in any future debt collection or brokering activities.
According to the FTC, GCI and Redon employed unethical and illegal tactics to coerce consumers into paying debts they did not owe. These practices not only violated federal laws but also exploited vulnerable consumers through intimidation and deceit.
“Using a playbook of intimidation and threats of jail time to coerce consumers into paying debts that they don’t owe is beyond the pale,” stated Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “The FTC will not hesitate to act against phantom debt collectors to shut down their operations.”
Allegations Highlight Egregious Wrongdoing
The FTC’s complaint spells out numerous violations by GCI and Redon, detailing how the company used deceptive and abusive debt collection practices to unlawfully extract payments from individuals. Key allegations include:
- Use of Fictitious Company Names: GCI contacted consumers while using aliases to obscure their identity, creating confusion and an air of false legitimacy.
- Unfounded Threats: Individuals were threatened with arrest, wage garnishment, and lawsuits if they failed to make payments on alleged debts.
- Phantom Debts: GCI attempted to recover payments for debts that didn’t exist or that they had no legal authority to collect.
- Failure to Comply with Federal Law: The FTC alleges that GCI violated the Fair Debt Collection Practices Act (FDCPA) by failing to identify themselves as debt collectors.
- Unlawful Data Usage: Redon and GCI are accused of obtaining consumers’ financial information through methods that contravened the Gramm-Leach-Bliley Act.
The FTC first intervened in November 2024, obtaining a temporary restraining order to end GCI’s operations. This latest proposed order is seen as a final step in permanently barring the defendants from the debt collection business.
Key Provisions of the Proposed Order
Under the terms of the proposed order, Kenneth Redon III and GCI face severe restrictions and penalties, reflecting the seriousness of their misconduct. The order outlines the following measures:
- Permanent Ban from Debt Collection Activities: The defendants are prohibited from collecting, brokering, or engaging in any activity related to debt.
- Prohibition Against Misrepresentation: GCI and Redon cannot misrepresent facts about products, services, or any affiliations with businesses or individuals.
- Enforcement of Consumer Protections: The defendants must comply with the FTC’s Impersonation Rule and the Gramm-Leach-Bliley Act, ensuring no further violations of consumer rights.
Additionally, the order imposes a monetary judgment of $9,684,338. Although the full amount has been suspended, Redon and GCI are required to forfeit all remaining assets. Should they be found providing false information about their finances, the total judgment will be reinstated.
Broader Implications for Consumer Protection
This case serves as a critical example of the FTC’s commitment to safeguarding consumers against unethical and illegal financial practices. By permanently dismantling GCI’s operations, the FTC reinforces its zero-tolerance stance toward phantom debt collectors who exploit and intimidate consumers.
The $9.7 million judgment, combined with the operational bans, underscores the importance of deterring fraudulent actors in the debt collection industry. It also sends a strong message to companies about the consequences of violating consumer protection laws.
With a unanimous 3-0 vote, the Commission authorized the filing of the amended complaint and final order in the U.S. District Court for the Northern District of Georgia. The outcome signals a clear directive for businesses to prioritize ethical conduct and transparency when dealing with consumers.
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