SHERMAN – On March 21, the Sherman Division of the Eastern District of Texas found Timothy Ford guilty of violating the Fair Debt Collection Practices Act (FDCPA). In its ruling the court ordered Ford to pay a $2 million civil penalty.

Ford is president of Dallas-based Commercial Recovery Systems. In January 2015, the United States government brought a suit against Ford and David Devany, who had been vice president of Commercial Recovery Systems. The suit was brought against the men in their positions as officers of the company and as private citizens.

In its complaint, the government alleged that Ford had violated not only the FCDPA but also the Fair Trade Commission Act. Ford was accused of impersonating judicial employees and attorneys, making false threats and “misrepresenting the legal status of a debt.”

While the suit was filed in 2015, investigations into the business practices of Commercial Recovery Systems started much earlier. The first series of documented consumer complaints were filed in 2011. In March 2013, Ford became aware that the company was under investigation by the Federal Trade Commission.

During the course of the case, court documents state Ford admitted that he willingly hired collections staff who were aggressively forceful and abusive. When complaints would arise against these individuals, as long as they were successfully collecting on debts, no disciplinary actions were taken. For his non-action, the court found that Ford willingly violated the law.

In its ruling, the court cited FTC v Hughes, 710 F. Supp. 1524, Case 4:15-cv-00036-ALM (N.D. Tex. 1989) stating “'complete' culpability where the defendant 'had actual knowledge of Rule violations, [was] responsible for the day-to-day decisions . . . and ha[d] directed and controlled his employees' activities.'”

Although Devany was named in the case, he had been “removed” from the company by Ford and the court did not order him to pay any part of the penalty.

The case was decided by Judge Amos Louis Mazzant III.

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