ST. LOUIS (AP) — A suburban St. Louis-based debt collection company has been ordered by the Federal Trade Commission to pay more than $24 million for pursuing money that consumers didn't actually owe.
The St. Louis Post-Dispatch cited court filings posted Wednesday in U.S. District Court. The legal complaint says Midwest Recovery Systems of Earth City would collect “phantom payday lending debts, purported medical debts and other debts that (the company is) consistently unable to verify.”
The lawsuit says the company continued to collect the debts “even after receiving multiple red flags that these debts were invalid.”
MRS was ordered to pay back $24.3 million and is barred from unlawful debt collection practices.
MRS co-owner Brandon Tumber told the Post-Dispatch that the FTC allegations are “totally false.” He said MRS received information about debts from clients, and was then held responsible for errors in the data by the FTC. He said any errors were limited, and were among millions of accounts that they serviced.
Tumber said MRS was sold to CACi, another debt collection agency, in September 2019.