Federal Judge Orders Georgia Company To Shut Down For Alleged ‘Phantom Debt’ Collection Scam

The companies collected over $7.6 million through the scam.

A federal judge has ordered a Georgia-based company to shut down after accusations of a “phantom debt scam collection.” The company allegedly harassed people to pay off debts they did not actually owe.

WSB-TV reported the Federal Trade Commission’s filing, which detailed the debt collector’s alleged actions. The legal document claims the company lied to thousands by making empty and illegal threats of jail time. They even harassed family members to pressure victims to send the money.

The complaint explicitly named Kenneth Redon III as the perpetrator of the scheme. Redon III allegedly used multiple business names, like Global Circulation and Consumer Impact Recovery, to harass people to pay debts. The companies collected over 7.6 million through the scam.

The complaint stated, “Their scheme is predicated on convincing consumers that a lawsuit or other legal action has been, or will soon be, filed against them and will result in dire consequences unless consumers pay defendants promptly that they do not actually owe.”

A judge determined that the businesses preyed on vulnerable customers and “falsely represented” that they were behind on certain loans. Moreover, companies often had no legal authority to collect these payments, with the intimidation tactic a core part of phantom debt collection.

“Debt collectors should know that harassing families and making empty threats of jail time is illegal,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “This action should send a clear message that illegal collection practices will come with heavy consequences.”

Georgia Watch Executive Director Liz Coyle emphasized that people have legal protections in how debt collectors approach them. Coyle noted that regardless of whether one has debt or not, pressuring someone to pay up is against the law.

“You have a right, under the law, to ask the caller to produce evidence in writing that you owe said debt,” Coyle shared with the news outlet.