Penalty Amount
$24,300,000
The FTC settled with Midwest Recovery Systems for engaging in 'debt parking,' where it placed inaccurate debts on consumers' credit reports to force payment. The company collected over $24 million from such debts. The settlement requires it to delete all reported debts, stop the practice, and pay a $24.3 million monetary judgment.
Midwest Recovery must cease debt parking, delete all debts it reported to credit bureaus, and pay a monetary judgment of $24.3 million, with $56,748 due immediately and the rest suspended.
In-house legal teams should review all vendor and third-party service agreements, particularly those with debt collection agencies, data furnishers, and credit reporting service providers. Specific clauses to scrutinize include data accuracy warranties, credit reporting and furnishing obligations, dispute resolution mechanisms, indemnification provisions for Fair Credit Reporting Act (FCRA) violations, and audit rights. Agreements may require amendments to mandate pre-reporting debt validation, immediate deletion of disputed or inaccurate information, regular compliance certifications, and robust record-keeping requirements to prevent 'debt parking' or similar practices.
Entity
Midwest Recovery Systems
Also known as: Midwest Recovery
Industry
Financial ServicesOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2020/11/ftc-stops-debt-collectors-alleged-debt-parking-scheme-requires-it-delete-debts-it-placed-consumers
02 stipulation for permanent injunction and monetary judgmen
https://www.ftc.gov/system/files/documents/cases/02_-_stipulation_for_permanent_injunction_and_monetary_judgment.pdf
01 complaint
https://www.ftc.gov/system/files/documents/cases/01_-_complaint.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"Midwest Recovery Systems"
"monetary judgment of $24.3 million"
"FTC Act"
"Fair Debt Collection Practices Act (FDCPA)"
"Fair Credit Reporting Act (FCRA)"
"FCRA’s Furnisher Rule"
The FTC sent warning letters to 12 companies offering 'nudify' tools that generate nonconsensual intimate images, for failing to comply with the TAKE IT DOWN Act (TIDA) by not providing a mechanism for victims to request removal of such content. The letters urge immediate compliance with TIDA, which requires platforms to remove nonconsensual intimate images within 48 hours of a valid request. Noncompliant companies may face future legal action and civil penalties of up to $53,088 per violation.
The FTC began enforcing the TAKE IT DOWN Act on May 19, 2026, a law requiring covered platforms to establish a process for victims to request removal of nonconsensual intimate images and delete such content within 48 hours of a valid request. The agency launched a consumer complaint portal, issued compliance guidance for businesses and consumers, and sent reminder letters to major platforms including Meta, TikTok, and X about their obligations under the law. No specific penalties or enforcement actions against individual companies were announced in this release.
$6.5M
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$795.8M
The FTC and State of Nevada settled charges with lead defendants of the IM Mastery Academy MLM scheme, including Chris and Isis Terry and their affiliated companies, over false earnings claims used to promote financial training programs and a multi-level marketing venture. The stipulated order imposes a $795.8 million judgment, with defendants surrendering nearly $90 million in assets including luxury real estate, vehicles, jewelry, and a yacht, totaling over $100 million with prior judgments from other involved defendants. The order also bans defendants from selling trading-training services, prohibits false earnings claims, and restricts deceptive practices including negative-option misrepresentations and telemarketing violations.
The FTC and State of Illinois, via the Department of Justice, filed a complaint against B.E.S.T. GDR LLC (d/b/a Premium Home Service) and its owner Yosef Bernath for creating thousands of fake home repair business listings with fabricated five-star reviews to deceive consumers. The defendants allegedly routed consumer calls to unqualified representatives, arranged for unlicensed technicians, and violated the FTC Act, Reviews and Testimonials Rule, Gramm-Leach-Bliley Act, and Illinois consumer protection laws. No monetary penalty has been imposed yet as the case is in initial filing stages.
Federal Trade Commission Chairman Andrew N. Ferguson sent letters to over a dozen major technology companies reminding them of their obligation to comply with the Take It Down Act (TIDA) by May 19, 2026. TIDA requires covered platforms to establish a process for victims, including children, to request removal of nonconsensual intimate images, with takedown of content and all identical copies required within 48 hours of a valid request. The FTC also issued supplemental guidance to help companies prepare for compliance and warned that it will monitor and enforce violations of the law.