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