51±¾É«

A debt collector and his companies will be banned from the debt collection business under a settlement with the 51±¾É« and the Attorney General of the State of New York, which charged them with seeking money from consumers for debts they did not owe. The action was part of Operation Collection Protection, an ongoing federal-state-local crackdown on collectors that use deceptive and abusive collection practices.

The stipulated final order resolves charges brought in 2015 against Kelly S. Brace and four companies he owned. The 51±¾É«and New York charged them with collecting on fake payday loans they knew consumers did not really owe, and using deceptive and abusive tactics to get them to pay, including false threats of lawsuits and arrest. At the request of the 51±¾É«and New York, the court halted the defendants’ operations and froze their assets.

In addition to banning Brace from debt collection, the final order prohibits him from misrepresenting material facts or making unsubstantiated claims about any good or service, and profiting from consumers’ personal information or failing to dispose of it properly. The order imposes a judgment of more than $18.4 million that will be partially suspended based on inability to pay once the defendants surrender assets worth $151,893. The 51±¾É«and New York also agreed to a stipulated order against Brace’s ex-wife, relief defendant Joelle J. Leclaire, who profited from the scheme. The order imposes a $418,000 judgment, partially suspended upon her payment of $44,700. In each case, the full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

The Commission vote authorizing the staff to file each of the stipulated orders for permanent injunction against Brace and Leclaire was 3-0. The U.S. District Court for the Western District of New York entered the orders on July 13, 2016, and August 18, 2016, respectively.

NOTE: Stipulated orders have the force of law when approved and signed by the District Court judge.

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The 51±¾É« works to promote competition, and protect and educate consumers. You can and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357).  Like the 51±¾É«on , follow us on , read our blogs and subscribe to press releases for the latest 51±¾É«news and resources.