Latest Fake Debt Scam

May 5, 2015 by

Scam Warning!The Consumer Financial Protection Bureau (CFPB) recently sued the alleged scammers behind a robo-call operation aimed at convincing consumers to make payments against a past due debt that the consumer did not owe to the company behind the robo-calling or, in most cases, did not owe at all.

According to the CFPB press release:

The CFPB alleges that Marcus Brown and Mohan Bagga led a group of individuals and entities that threatened, harassed, and deceived consumers in order to collect phantom debt. Phantom debt is debt consumers do not actually owe or debt that is not payable to those attempting to collect it. According to the complaint, Brown and Bagga and those working with them used many fictitious names as they threatened consumers with arrest, wage garnishment, and “financial restraining orders.”

Debt Collection Tactics Used

The collection tactics used by the subject of the CFPB’s lawsuit are not unusual among collection agencies, but are especially loathsome given how they were allegedly used—to scam people. Again according to the CFPB:

The CFPB’s complaint alleges that consumers were tricked into believing that the collectors were legitimate because the collectors verified consumers’ personal information, such as date of birth, social security number, the names of family members, and employment information. According to the complaint, Brown and Bagga purchased consumers’ personal information from debt brokers and lead generators. They then used a telemarketing firm, Global Connect, to automatically broadcast robo-calls to millions of consumers. The calls alleged that the consumer had engaged in check fraud and threatened to contact the consumer’s employer.

Some Consumers Tricked

When a scammer makes millions of robo-calls, some calls will strike gold. Sadly some consumers victimized by this scheme turned over debit or credit card information. The scammer then used payment processors to enable access to the victims’ bank accounts.

Companies Named

Debt collection companies named in the lawsuit are Universal Debt and Payment Solutions, LLC; Universal Debt Solutions, LLC; WNY Account Solutions, LLC; WNY Solutions Group, LLC; Check & Credit Recovery, LLC; Credit Power, LLC; and S Payment Processing & Solutions, LLC. Specifically, these companies and their owners are charged with these illegal tactics:

  • harassed consumers with threatening robo-calls;
  • collecting or attempting to collect phantom debt;
  • threatening legal action against consumers; and
  • deceiving consumers to collect debts.

Be Careful Out There!

This story just shows that, whether or not you have past due debts, you can be subject to harassment and other illegal tactics from real or pretend debt collectors. If you do have legitimate debts in collections, you’re probably not aware that you have rights too! Read the Money Counselor Simple Guide WIN the Battle with Debt Collectors! to learn your rights and how to fight back.

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