Massachusetts Court Orders Alleged Phantom Debt Collectors To Cease Operations

 Massachusetts has obtained a preliminary injunction shutting down the operations of a Franklin-based “phantom” debt collection scheme accused of using threats, profanity, and deception to extract payments on bogus or unverified debts from consumers in the Commonwealth.

Case overview

According to a June 15, 2026 announcement from Massachusetts Attorney General Andrea Joy Campbell, the court’s order targets former Franklin-based debt buyer Assessment Resolution, LLC, Franklin-based collector East Coast Financial (ECF), and the companies’ owners, brothers Paul and Richard Santorsola. The Attorney General’s lawsuit alleges that ECF operated as a “phantom” debt collector, seeking to collect debts consumers did not owe or that were otherwise unsubstantiated, and doing so through abusive and misleading tactics.

The court’s preliminary injunction requires the defendants to immediately cease all debt collection activities directed at Massachusetts consumers. The order also bars them from destroying or tampering with evidence and from dissipating assets while the enforcement action proceeds.

Alleged collection conduct

The AG’s complaint describes a pattern of high-pressure, abusive phone-based collection efforts. ECF is alleged to have called consumers and used profane and threatening language to coerce payment. Collectors allegedly misrepresented the existence, amount, and legal status of debts, including implying imminent lawsuits, wage garnishments, or other legal consequences that were either false or exaggerated.

The “phantom” nature of the debts means some consumers were pursued over obligations they did not owe at all, or that were not legally enforceable, echoing fact patterns seen in prior FTC phantom debt actions. The AG’s office positions this conduct as a violation of Massachusetts’ prohibition on unfair and deceptive acts and practices in debt collection, as reflected in state law and the Attorney General’s debt collection regulations.

Terms of the court’s order

The preliminary injunction imposes several immediate operational restrictions. The defendants must halt all collection activities, including calls and other communications attempting to collect on the alleged debts from Massachusetts residents. They are also prohibited from destroying, altering, or concealing business records and other evidence that could be relevant to the case.

In addition, the order bars the defendants from dissipating or transferring assets outside the ordinary course of business, preserving funds for potential restitution or penalties if the AG ultimately prevails. These types of asset-preservation measures mirror relief often obtained by the FTC in phantom debt cases, where courts have frozen assets and later ordered permanent bans and monetary judgments against operators.

Legal and regulatory context

Massachusetts law prohibits unfair, deceptive, and unreasonable debt collection practices, and the Attorney General has issued regulations that define and restrict abusive conduct by collectors. The AG’s office regularly encourages consumers to demand proof of debt, withhold sensitive personal information from unverified callers, and report suspected scams to enforcement agencies.

At the federal level, the FTC has brought a series of enforcement actions against phantom debt operations, securing court orders that halt operations, freeze assets, and in some cases permanently ban defendants from the debt collection industry. In one recent matter involving Blackstone Legal and related entities, the defendants agreed to a proposed order that would permanently bar them from debt collection, prohibit misrepresentations, and require the surrender of assets under an $8.25 million judgment. The Massachusetts action fits squarely within this broader state–federal focus on fake debt schemes.

Implications for legitimate collectors and debt buyers

For licensed collectors and debt buyers operating in Massachusetts, the case underscores the scrutiny regulators are applying to both portfolio provenance and collection tactics. Phantom debt cases highlight the importance of robust documentation, clear chain of title, and policies to prevent collection on unverified or time-barred accounts. The alleged use of profanity, false threats of lawsuits, and misrepresentation of legal consequences also reinforces that conduct which would violate the FDCPA in a federal context can trigger separate state UDAP and regulatory violations.

The injunction also signals that Massachusetts courts are willing to grant broad interim relief—including full operational shutdowns and asset restraints—where officials present evidence of systemic abuse and risk of consumer harm. That reality may influence how collection businesses assess enforcement risk, respond to investigative inquiries, and document compliance programs in the Commonwealth.

Consumer and industry takeaways

For consumers, the AG’s announcement serves as a reminder to be skeptical of aggressive, threat-based collection calls and to insist on written validation of any alleged debt. The case also demonstrates that state authorities can and will move quickly to stop operations they view as fraudulent, while preserving evidence and assets for potential redress.

For the credit and collections industry, the Massachusetts order is another data point in a continuing pattern: state attorneys general and the FTC are actively targeting phantom debt schemes, often seeking not only injunctive relief but permanent bans and significant monetary judgments. Legitimate firms may want to monitor this case for any final judgment or settlement terms that further define the contours of prohibited practices and potential remedies in phantom debt matters.