Fake debt-collector calls from India halted by Court

A federal judge in the U.S. District Court for the Northern District of Illinois has halted an operation that the Federal Trade Commission alleged collected phantom payday loan “debts” that consumers did not owe.

The FTC charged Villa Park, Calif.-based American Credit Crunchers LLC, an affiliated company known as Ebeeze LLC, and the companies’ owner, Varang K. Thaker, with violating the FTC Act and the Fair Debt Collection Practices Act.

In the last two years, consumers in the United States have received millions of collection calls from India by Thaker and his related companies.

According to the FTC’s complaint, American Credit Crunchers and Thaker obtained information, including Social Security or bank account numbers, about consumers who had inquired about, applied for or obtained online payday loans. Thereafter, Thaker worked with telephone “debt collectors” in India who called consumers using deceptive statements and threats to convince them to pay debts that were not owed or that he was not authorized to collect.

According to the FTC, Thaker and his companies falsely told consumers they were delinquent on a loan, they must pay it and they had the authority to collect it. They also falsely claimed to be law enforcement authorities or attorneys and made false threats against consumers who refused to pay the alleged debts, including threats of arrest or imprisonment. Many consumers often felt so harassed and threatened that they paid the alleged debts out of fear of being arrested or sued.

The FTC alleged that information submitted by consumers who applied online for the fake payday loans found its way into the hands of the American Credit Crunchers and Thaker. Since January 2010, the operation took in more than $5 million from victims across the United States.

Often pretending to be law enforcement officers or other governmental authorities, the telephone “debt collectors” would falsely threaten to immediately arrest and jail consumers if they did not agree to make a payment on a delinquent payday loan, the FTC’s court papers stated.

Claiming to be from a local police department, or simply a “federal investigator” from the “Federal Department of Crime and Prevention,” “Affidavit Consolidation Services,” Criminal Bureau of Identity,” “U.S. National Bank,” “US Justice Department/Payday Loan Division,” “Federal Investigation Bureau,” “United Legal Processing” and other phony names, the telephone callers often demanded more than $300 and sometimes as much as $2,000.

At other times, according to the FTC, the telephone “debt collectors” said they would file a lawsuit against the consumer because of the delinquent payday loan or would have them fired from their job.

But the consumers did not owe money to American Credit Crunchers or Thaker. Either the payday loan debts did not exist or the phony telephone “debt collectors” had no authority to collect them because they were owed to someone else.

The court order halts the illegal conduct and freezes the assets of American Credit Crunchers and Thaker while the FTC continues to prosecute its case.

“This is a brazen operation based on pure fraud, and the FTC is committed to shutting it down,” stated David Vladeck, director of the FTC’s Bureau of Consumer Protection. “Consumers should not be pressured into paying debt they don’t remember owing. Legitimate debt collectors must provide consumers with both written information about the debt, and instructions for protecting themselves if they don’t think they owe the debt.”

If contacted by a debt collector, always remember that:

1. A debt collector may contact you in person, by mail, e-mail, telephone, telegram or fax. A collector may not contact you with such frequency that can be considered harassing. A debt collector may not contact you at work if they know your employer does not disapprove, nor may they contact you at unreasonable times or places, such as before 8 a.m. or after 9 p.m.

2. A debt collector is required to send written notice within five days of first contact advising the amount due. The notice must also specify the name of the creditor and what action to take if you wish to dispute the debt.

3. You may stop a debt collector from contacting you by writing a letter ceasing them from communication. Once the agency receives it, they may not make further contact except to advise there will be no further contact or to notify you of a specific action contemplated by the creditor.

4. A debt collector may not harass or abuse a consumer. A collector may not use threats of violence against a person, property or reputation; use obscene or profane language; advertise the debt; or repeatedly make calls with the intent to harass or abuse the person at the called number.

5. Debt collectors may not use false statements, such as implying they are attorneys; that you have committed a crime; that they operate or work for a credit reporting agency; misrepresent the amount of a debt; or indicate that papers mailed are legal forms when they are not.

6.) Debt collectors may not threaten arrest or that they will seize property or garnish wages unless the collection agency or creditor intends to do so; or that a lawsuit will be filed when they have no legal right to file or do not intend to file such a suit.

If you are being harassed by a debt collector — real or fake — file a complaint with the Attorney General’s office or with the Federal Trade Commission at www.ftc.gov.

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