Beware of fake debt collection calls

Over the past decade, America has truly transitioned into a debtor society. Despite high unemployment, record foreclosures and tough economic times, consumers are more likely to borrow than delay when making a purchase. With consumers having obligations to multiple financial institutions, keeping accurate records and documentation can become a challenge. Opportunistic con-artists posing as fake “debt collectors” recognize this as an area of vulnerability and are more than willing to use it to their advantage.

On Tuesday, the Federal Trade Commission cracked down on a California-based company that used call centers in India to make fake and often very threatening debt collection calls to consumers in the United States. Following a complaint filed by the agency, a U.S. district court in Chicago ordered a halt to such calls.

In this first of its kind case, call centers in India were used to make fake debt collection calls to unsuspecting Americans. The FTC alleged that over $5 million was collected through the scam until shut down by the court.

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

Thaker and his companies falsely told consumers they were delinquent on a loan, that they had the authority to collect them and that they must pay immediately. The fake debt collectors also falsely claimed to be law enforcement officers or attorneys while making threats against those who refused to pay the alleged debts. These threats included arrest or imprisonment. Many consumers felt so threatened that they paid the alleged debts out of fear of being arrested or sued.

These fake debt collectors spoke English with a foreign accent and called themselves “Affidavit Consolidation Services,” Criminal Bureau of Identity,” “U.S. National Bank,” “U.S. Justice Department/Payday Loan Division,” “Federal Investigation Bureau,” “United Legal Processing” and other phony names. They refused to disclose real names and addresses and were believed to be operating from homes and automobiles in India. As these scammers kept themselves well hidden, law enforcement authorities had previously been unsuccessful in locating or shutting them down.