Court Halts Alleged Fake Debt Collector Calls from India

We’ve been warning consumers about fake overseas payday loan collection scams for a few years now. So it can be disheartening when we hear stories, like the one that was posted last week on our blog:

I received a recorded call at work that said I had written a bad check and would be served court papers…that day. The message then left a phone number to call to try to “settle” or arrange a payment plan. I got really scared and called the number. The lady said…they are middle man to recover past due pay day loans.

I don’t think I owe this debt, but I was so shaken that I did pay them a $50 payment, and set up a payment plan of $200 a month to pay a total of $960.00. She sent me an email receipt but it does not look legitimate to me. Their logo is weird, there is no address, and no website. She said it’s a loan with quick cash. I tried to google quick cash and nothing comes up.

I don’t want to keep paying them if this is a scam, and I guess the worst that could happen is to be served or have my check garnished? I just don’t like the fact that they are calling my work place. Should I call them back and ask them for their address, business license and for the original paperwork for the debt owed? I am not sure if this is a real collection agency. Please help!

Bogus collectors scare consumers into paying debts they either don’t owe, or paid off long ago. Because they have so much information about the consumer—details such as Social Security numbers, work addresses, and/or bank account numbers—the victim often pays up thinking it must be legit. And because these operations are often based overseas, it can be difficult, if not impossible, for regulators to stop them.

Another One Bites the Dust

That’s why it’s especially sweet to hear news like this released last week by the FTC, which reported:

A U.S. district court has halted an operation that the agency alleges collected phantom payday loan debts that consumers either didn’t owe to the defendants or didn’t owe at all. The defendants’ scheme involved more than 2.7 million calls to at least 600,000 different phone numbers nationwide, according to the FTC. In less than two years, they fraudulently collected more than $5.2 million from consumers, many of whom were strapped for cash and thought the money they were paying would be applied to loans they owed, according to FTC documents filed with the court.

According to the FTC, representatives of the company would pretend to be American law enforcement agents, using names like “Officer Mike Johnson.” Or they would claim to be calling from fake government agencies like the “Federal Crime Unit of the Department of Justice.” In reality, the callers would be placing calls from India. They would often wear their victims down with repeated calls and threats. One woman was told her children would be taken away if she didn’t pay.

The case, Federal Trade Commission, Plaintiff, v. Broadway Global Master Inc., also doing business as BGM, In-Arabia Solutions Inc., and Kirit Patel, Defendants, was filed in the United States District Court for the Eastern District of California.

In the public announcement, the FTC thanked the Better Business Bureau for its assistance in this case. And guess what that means? Complaints from consumers who were getting these calls helped to stop the operation. So if you are getting threatening calls like this, don’t be afraid to report them to the Federal Trade Commission and the Better Business Bureau. While the FTC may not be able to help you personally, they may be able to go after companies that generate multiple complaints from consumers.

Don’t Be a Debt Collection Scam Victim

Keep in mind that legitimate debt collectors are required under federal law to:

Send written confirmation of a debt within three days of initial contact and, if the consumer disputes or questions the debt, to verify it.
Stop calling debtors at work if they tell them to stop.
Avoid threatening consumers with legal action they cannot take or don’t intend to take. Debt collectors generally can’t have debtors arrested for failing to pay debts.

NOTE: The Commission files a complaint when it has reason to believe that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law.