By: Jeffrey Lapin
According to the Federal Trade Commission (FTC) many consumers throughout the country have reported getting telephone calls from phantom debt collectors trying to collect on fake or false debts. The FTC has started targeting these phantom debt collectors and have filed suit against a group that has allegedly collected over $5 million dollars.
“Phantom debt collector” also called “fake debt collector” or “false debt collector” are typically scammers trying to get money or obtain information so they can commit identity theft. Usually, the phantom debt collectors call trying to collect on a debt the consumers did not receive. In some cases, the consumer did receive the loan but for amount considerable less than what is trying to be collected. Finally, some consumers are receiving calls from receiving calls from phantom debt collectors who are not authorized to collect the debt they claim to be calling about.
RECENT SCAM
According to the FTC, one scam, which began in January 2010, has taken $5 million so far from United States citizens. The scam involved approximately eight million phone calls originating from India to American consumers over an eight-month period. These phantom debt collectors collected personal information about consumers who had inquired or applied for an online payday loan. With this information, these scammers would call consumers, often posing as law enforcement officers or other governmental officials, and threaten people with arrest, lawsuits or the loss of employment, These callers would usually demand payments of about $500.00, but sometimes as much as $2,000.00. Some people, even when they knew they did not owe money, paid just to avoid a threatened potentially embarrassing situation or arrest.
FTC LAWSUIT
In an effort to stop this scam, The FTC charged California-based American Credit Crunchers, LLC, an affiliated company called Ebeeze, LLC, and the companies’ owner, Varang K. Thaker, with violating the FTC Act and the Fair Debt Collection Practices Act (FDCPA). The case is Federal Trade Commission v. American Credit Crunchers, LLC, Ebeeze LLC, and Varang K. Thaker, which is pending in in the United States District Court for the Northern District of Illinois, Eastern Division), Case No. 12cv1028, FTC File No. 1023191. The U.S. District Judge granted the FTC’s request for preliminary injunction stopping the companies from calling consumers. The FTC is seeking that these companies cease all calls and return all monies they received.
In discussing this lawsuit, David Vladeck, Director of the FTC’s Bureau of Consumer Protection stated:
This is a brazen operation based on pure fraud, and the FTC is committed to shutting it down. . . . 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.
The case is still pending. Updates on the case are available on the FTC’s website here.
Consumers who were a victim of this scam are urged to contact the Federal Trade Commission at1-877-FTC-HELP (1-877-382-4357) or online on the FTC Complaint Assistant.
PRIOR POSTS REGARDING DEBT COLLECTION
- Proposed FDCPA Amendment Would Allow Messages By Collectors
- CFPB Proposes Rule to Define “Larger Participants” It Will Monitor
- Social Media and Debt Collection: Facebook and Twitter (Part1)
- Social Media and Debt Collection: Limited in the United Kingdom (Part 2)
- Social Media and Debt Collection: The United States (Part 3)
ABOUT LAPIN LAW OFFICES
Lapin Law Offices represents consumers harassed or abused by debt collectors, whether real or phantom, and those whose rights have been violated under the Fair Debt Collection Practices Act (FDCPA). You can learn more about your rights by calling us at 402-421-8033 (Lincoln), 888-525-8819 (Toll Free) or through our websites: Lapin Law Offices or StopBadCollectors.com.