WASHINGTON, D.C. — A federal court has taken decisive action to shut down a phantom debt collection scheme, freezing its assets and temporarily halting operations following a lawsuit filed by the Federal Trade Commission (FTC). The scheme, alleged to have deceived countless consumers through fabricated debts and unlawful threats, has operated under various names, including Blackrock Services, Blackstone Legal Group, Capital Legal Services, and Viking Legal Services.
According to the FTC’s complaint, the scheme was led by Ryan and Mitchell Evans, along with their affiliated companies. Debt collectors associated with the operation reportedly used deceptive letters and phone calls to pressure consumers into paying debts that the FTC asserts never existed. The complaint alleges that the collectors made baseless legal threats, warning consumers of impending lawsuits, wage garnishments, harm to credit scores, and even arrest if payments were not made.
The operators of the scheme also falsely posed as legal firms and used the names of legitimate businesses, violating the FTC’s Rule on Impersonating Government and Businesses. Letters sent to consumers often included sensitive personal information, such as partial Social Security numbers, to appear credible. Websites tied to the scheme reinforced these false threats, claiming consumers faced severe consequences, such as wage garnishment or home seizure, for failing to settle the fabricated debts.
Further, the FTC alleges the scheme violated the Fair Debt Collection Practices Act by failing to disclose identity as debt collectors and disregarding other legal obligations. Through aggressive and deceptive tactics, the operation exploited consumers under the pretense of collecting payday loan debts, according to the lawsuit.
The FTC is seeking to halt the defendants’ practices permanently and obtain redress for affected consumers. The court’s current actions aim to disrupt the fraudulent activities while legal proceedings continue.
The Commission’s decision to file the lawsuit was unanimous, with a 4-0 vote. The case has been filed in the U.S. District Court for the Central District of California. This legal step aims to protect consumers from abusive and fraudulent debt collection practices.
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