Right on the heels of news that one in three Americans is behind on bills, comes this report about the lengths some are going to collect those debts.

The latest Consumer Financial Services Alert, from law firm Ballard Spahr, is highlighting some alleged nefarious tactics from bill collectors in New York.

The New York Attorney General and Federal Trade Commission are working together to put an end to several companies, working together, who violated the rights of distressed borrowers.

“This filing is further evidence of the heightened scrutiny faced by debt collectors in New York at both the state and federal level,” the note to Ballard Spahr clients said.

Read a copy of the asset freeze and temporary restraining order, by clicking here.

The main defendant is the National Check Registry, though many other companies are named in concert.

“Weighing the equities and considering Plaintiffs' likelihood of ultimate success, a temporary restraining order with an asset freeze, appointment of a receiver, immediate access to business premises, expedited discovery as to the existence and location of assets and documents, and other equitable relief is in the public interest,” the order states.

So what did the collectors do to deserve such an extensive correction and potential restitution for the borrowers they allegedly hounded?

According to the complaint, the defendants are suspected of, among other things:

1. Pretending to be affiliated with government entities, including law enforcement agencies.

2. Pretending to act on behalf of an attorney.

3. Telling people that nonpayment of debt will result in arrest, garnishment of wages and/or confiscation of their driver’s license.

4. Threatening other legal action if debt doesn’t get paid.

That’s just the beginning. The associated defendants also allegedly worked together as a network to become more effective. They also threatened debtors by saying they would disclose the debt to their bosses.

The really outrageous claim, however, is the allegation that some of these debt collectors tried to collect debts discharged previously in bankruptcy proceedings.

“The federal court also ordered both the individual and corporate defendants to provide an immediate accounting 'within three days of service of this order,' as well as repatriate all foreign assets,” the Ballard Spahr note states.

“The Attorney General’s latest enforcement action, in conjunction with the DFS’ proposal, illustrates that debt collectors and debt buyers will remain under intense regulatory scrutiny in New York for the foreseeable future,” they said.

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