Consumers received millions of collection calls from India as part of the operation.
Often pretending to be law enforcement or other government authorities, the callers 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 law enforcement, such as a local police department, the “Federal Department of Crime and Prevention,” or simply a “federal investigator,” the callers typically demanded more than $300, and sometimes as much as $2,000.
Sometimes, the callers said they were filing a lawsuit against the consumer because of the delinquent payday loan or would have the consumer fired from his or her job, according to the FTC.
Many consumers turn to high-interest, short-term payday loans between paychecks.
The FTC charged Villa Park, 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.
According to the FTC’s complaint, Thaker obtained information – including Social Security or bank account numbers – about consumers who had inquired about, applied for, or obtained online payday loans.
Thaker worked with telephone callers 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, the FTC alleged.
Over the last two years, consumers have filed more than 4,000 complaints with the FTC and state attorneys general about fraudulent debt collection calls.
For more information on how to handle callers who claim to be debt collectors, see the FTC’s Who’s Calling? That Debt Collector Could Be a Fake.