WASHINGTON (Legal Newsline) — The Federal Trade Commission (FTC) has announced that Kelly S. Brace and his four companies have been banned from the debt collection business after a settlement with the agency and the attorney general of New York.


According to allegations, the defendants sought money from consumers for debts they did not owe. The companies purportedly collected fake payday loans. Additionally, the FTC and New York allege the defendants used deceptive and abusive tactics to coerce payments. This included falsely threatening lawsuits and arrests.


The action comes as part of the FTC’s Operation Collection Protection, an ongoing attempt to stop collectors from using deceptive and abusive practices. The operation is being run at the federal, state and local levels.


Brace, as part of the order resolving the case, owes more than $18.4 million. The amount will be partially suspended based on inability to pay. The FTC and New York also agreed to a stipulated order against Brace’s ex-wife, relief defendant Joelle J. Leclaire, who profited from the alleged scheme.


The FTC voted 3-0 to file the stipulated orders for permanent injunction.

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