Operation Corrupt Collector targets debt collectors trying to collect on non-existent debts, using illegal scare tactics
PHOENIX - Attorney General Mark Brnovich filed a consumer fraud lawsuit against Arizona residents Mark Anthony Smith and Deborah Ann Butler, who operated debt collection businesses CMS Financial Group, John Lee Group & Associates, and TD Financial Solutions Group AZ. The Attorney General's Office (AGO) lawsuit alleges the defendants call consumers nationwide (including Arizonans), and make false claims and threats to convince them to pay debts that they have no authority to collect.
According to the AGO lawsuit, Smith and Butler’s debt collection businesses impersonate law enforcement officers and process servers when calling consumers. In voicemails (recordings provided below), the defendants tell consumers that they must immediately respond or be subject to court action. When people return the voicemails, the defendants allegedly try to intimidate consumers by threatening to garnish wages and tax returns, place liens on houses and car titles, freeze bank accounts, send law enforcement to consumers’ homes and/or place of employment, and have consumers arrested.
“Debt collectors cannot pretend to be law enforcement and they cannot threaten to arrest consumers,” said Attorney General Brnovich. “If consumers get phone calls threatening arrests, they should hang up the phone and report it to our office.”
The State alleges Smith and Butler frequently use spoofing software to make it appear their calls originate from government agencies. Between January 2016 and May 2020, the defendants placed approximately 65,800 spoofed calls, many of which appeared to be from courthouses, law enforcement agencies, and other public offices.
The AGO alleges since October 2015, Smith and Butler have processed and collected over $1.6 million in payments from consumers. To date, the defendants have not provided any proof that they have any authority to collect the debt.
The AGO lawsuit seeks restitution against the defendants, civil penalties of up to $10,000 per violation, attorneys’ fees and costs, and injunctive relief.
Assistant Attorney General Alyse Meislik is handling the case.
Operation Corrupt Collector
The AGO lawsuit is part of Operation Corrupt Collector, a nationwide crackdown on abusive debt collection practices. Arizona, along with the Federal Trade Commission and more than 50 federal and state law enforcement partners, is participating in the initiative, which includes an outreach initiative to inform consumers of their rights.
Debt collectors must follow the Fair Debt Collection Practices Act, which includes rules against contacting you at work, contacting your friends or family and making any threats. More information can be found here.
If you believe you have been a victim of consumer fraud, please contact the Arizona Attorney General’s Office in Phoenix at (602) 542-5763, in Tucson at (520) 628-6648, or outside the metro areas at 1(800) 352-8431. Bilingual consumer protection staff is available to assist. Consumers can also file complaints online.
Copy of complaint.