District Court Orders 4 Star Resolution, FTC, and New York’s Attorney General into Mediation
An ongoing dispute between debt collection agency 4 Star Resolution, the Federal Trade Commission (FTC) and New York State’s Attorney General’s office has been referred to mediation by a U.S. District Court. 4 Star Resolution had been accused of violating the Fair Debt Collection Practices Act.
4 Star Resolution had been closed to all operations since February 2015 due to the investigation into its collection practices launched by the FTC and the Attorney General. Their attorneys filed a motion requesting they be allowed to resume a portion of their operations. This was followed by a separate motion requesting the whole dispute be referred to mediation.
The request for mediation was granted, but not the request to resume operations, possibly as a tactic to encourage the mediation process and offering 4 Star Resolution motivations to seek a settlement. The CEO of 4 Star Resolution has complained that with his company non-operational and assets frozen by the investigation, he cannot hire counsel or make other arrangements, including paying his employees. In response the court urged the FTC to agree to allow the company to use its assets to retain an attorney.
4 Star Resolution has complained that the investigation came without warning, and has unfairly frozen its operations, putting ninety employees into limbo and freezing the credit situations of people the company had been working with to resolve debt situations. However, it now has little recourse aside from engaging in the mediation process enthusiastically.