On October 11, 2011, the Federal Trade Commission filed an 18-page lawsuit against Rincon Debt Management, a debt collection company based in Corona, California, and six related companies. In the suit, the FTC alleges employees of the company were told to say “This matter is serious and will cause problems at the job” when they were trying to get money out of someone. The lawsuit accuses Rincon employees of falsely claiming to be process servers or calling on behalf of attorneys, falsely claiming that litigation was pending against the person they were calling for, and falsely claiming the so-called debtor might be arrested — all methods that are illegal. Additionally, according to the FTC, all seven companies appear to be the same group of people operating under different names, a scheme to further confuse and mislead.
On January 25, 2012, a U.S. district court judge in Los Angeles shut down the companies and had their assets temporarily frozen.