FTC Shuts Down $9.7 Million Debt Collection Scheme

• Phantom Debt Scheme: The FTC and Nevada AG accused Global Circulation Inc. of scamming consumers with fake debt collections and threats.

• Aggressive Tactics: Consumers were intimidated with jail, lawsuits, and wage garnishment, violating multiple federal laws.

• Permanent Ban: The company and its owner are barred from debt collection, with a suspended $9.7 million penalty pending asset turnover.

The Federal Trade Commission (FTC) and the State of Nevada have jointly dismantled a major phantom debt collection scheme that duped consumers out of millions of dollars.

According to the complaint, Global Circulation Inc. (GCI) and its owner, Kenneth Redon III, engaged in deceptive practices by falsely claiming consumers owed debts and using intimidation tactics to extract payments.

The FTC alleged that GCI’s operatives impersonated legitimate lenders and contacted consumers using fictitious company names, threatening arrest, lawsuits, and wage garnishment to collect money that was either not owed or not collectible. The amended complaint also revealed that GCI’s false claims violated the FTC’s Impersonation Rule.

“The FTC will not hesitate to act against phantom debt collectors,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, in a news release. “Using threats of jail time and legal action to coerce payments for fake debts is beyond the pale.”

Under a proposed court order, GCI and Redon are permanently banned from participating in debt collection and brokering. They are also prohibited from misrepresenting affiliations or material facts related to any business activity. The order includes a $9.7 million monetary judgment, which will be suspended once all remaining assets are turned over—though full payment will be enforced if financial misrepresentations are uncovered