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Exception Tracking Spreadsheet (TicklerTrax™)
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Debt parking scheme halted

The Federal Trade Commission has filed an action in U.S. District Court and received a stipulated Order for Permanent Injunction and Monetary Judgment against a debt collection company that allegedly placed bogus or highly questionable debts on consumers’ credit reports to coerce them to pay the debts. The FTC alleged that the company and its owners, Brandon M. Tumber, Kenny W. Conway, and Joseph H. Smith, had collected more than $24 million from consumers. Under a settlement with the FTC, the company, Midwest Recovery Systems (Midwest Recovery), is prohibited from the practice, known as “debt parking,” and required to delete the debts it previously reported to credit reporting agencies.

The settlement includes a monetary judgment of $24.3 million, which is partially suspended based on an inability to pay. Tumber and the company will be required to pay $56,748, and Tumber will also be required to sell his stake in another debt collection company and provide the proceeds from that sale to the FTC. In addition, Midwest Recovery will be required to surrender all of its remaining assets. If the defendants are found to have misrepresented their ability to pay, the full amount of the judgment would become immediately payable.

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