The Federal Trade Commission has accused Johnson County businessman Joel Tucker in a lawsuit of selling counterfeit debt portfolios to collection agencies and causing consumers to pay up on loans they did not owe.
The FTC filed suit in federal court in Kansas City, Kan., on Friday, asking a judge to grant a permanent injunction to force Tucker and business entities he purportedly controls to stop selling these allegedly fake debt packages. Those business entities are SQ Capital and JT Holdings, both of which have addresses in Mission; and HPD LLC, based in Wyoming.
Tucker, who could not be reached for comment, is the brother of Scott Tucker, the Leawood businessman and professional race car driver accused of running an illegal $2 billion payday loan operation.
Legitimate debt portfolios come from companies who have not received payments from consumers and who decide to sell those debts, often for pennies on the dollar, to third-party debt collectors. Those collectors, then, try to get the consumers to pay the remaining balance.
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The FTC said Joel Tucker sold bogus payday loan debt portfolios containing consumers’ Social Security numbers, bank account information, loan amounts and balances and repayment histories to third-party debt collectors.
Some of Tucker’s portfolios claimed that the debts came from 500FastCash, a registered trademark of Red Cedar Services Inc., a payday lending operation tied to Scott Tucker.
Both 500FastCash and Red Cedar Services were among the defendants listed in a 2012 FTC lawsuit against Scott Tucker that eventually led to a $1.26 billion judgment against him and others, setting a record amount for the FTC. Scott Tucker, who faces a criminal trial in New York related to his lending practices, is appealing that judgment.
The FTC’s lawsuit says Joel Tucker’s debt portfolios listed loans never extended to consumers. Tucker and his businesses, the FTC added, never purchased or received the right to sell debts listed in his portfolios.
“In numerous instances, debt collectors who received counterfeit portfolios marketed, transferred or sold by defendants have successfully induced consumers to pay the purported debts,” the FTC’s lawsuit said.
The FTC didn’t name the debt collectors who received Tucker’s allegedly bogus debt portfolios. Tucker, however, was connected to an investigation in Houston where a federal judge sought to discover why unverified payday loan debts, often in the amount of $390, from debt collectors kept showing up in consumer bankruptcy cases.
The debt collectors in that case said their debt portfolios came from Tucker through a broker. Porania, one of the companies that purchased these debt portfolios, eventually withdrew more than 1,000 of those debts from consumer bankruptcy cases throughout the country.