WASHINGTON (Legal Newsline) - The Federal Trade Commission (FTC) announced March 24 that American Municipal Services Corporation and its owners, Lawrence Bergman and Gregory Pitchford, have agreed to stop engaging in allegedly illegal collection tactics.
According to the commission, the defendants also will pay $350,000 in penalties.
American Municipal Services collects debts owed to municipalities. The operation collects various municipal debts -- court fines, parking tickets, and debts for utility bills and other services -- on behalf of 500 municipalities in multiple states. These states include Alabama, Arkansas, Illinois, Kansas, Louisiana, Mississippi, Oklahoma and Texas.
According to the FTC, the operation used a “Warrant Enforcement Division” or “Municipal Enforcement Division” letterhead sent to consumers to falsely associate itself with government agencies. The FTC charged the defendants with violations of the FTC Act and the Fair Debt Collection Practices Act (FDCPA).
The FTC voted 2-0 to authorize the staff to file the complaint and proposed stipulated final order. The order was entered March 21 by the U.S. District Court for the Eastern District of Texas.