By
Kenneth Long on February 22, 2012
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Callers from India have been committing egregious violations of the federal Fair Debt Collection Practices Act. After $5 million has already been taken in the scam, the Federal Trade Commission has finally tracked down the firms behind it and are shutting it down.
On February 13, the FTC filed a lawsuit against American Credit Crunchers LLC, Ebeeze LLC and owner Varang K. Thaker. Federal investigators claim that the defendents have orchestrated a massive fraud in which thousands of consumers were called and threatened with any number of illegal actions.
Debtors Unite previously reported on the
Federal Crimes Investigation Unit, in which debt collectors were falsely stating that they were government employees. Additionally, we have focused on the
fake debt collection agency scam that falsely accuses innocent consumers of owing nonexistent payday loan debt. Rather than risk legal action or damaged credit, many consumers paid the amounts due.
It turns out that American Credit Crunchers was the primary entity behind the scam. Collection agents were calling consumers and threatening lawsuit, arrest and imprisonment if the debts were not paid.
In some cases, the consumer had a payday loan but had already repaid the loan. In many situations, the consumer never owed any payday loan debt.
To further intimidate the victims, callers advised that they were with official sounding government investigation departments. Some of the fake identities included:
- Federal Department of Crime and Prevention
- Federal Crimes Investigation Unit
- federal investigator
- local police department detective
Victims who sent in money could have avoided becoming another statistic had they verified that the claimed debts were actually legitimate. Debt collectors are required by federal law to supply verification of any debt that they are trying to collect on if the debtor requests validation. Debtors may ask for validation when the collection agent calls, but they are encouraged to send a
validation request by mail so they have a copy for their records.
As far as American Credit Crunchers is concerned, they will now be crunching numbers on a possible prison sentence for owner Varang K. Thaker. Their assets have been seized so that regulators can attempt to maintain some hope for partial refunds to victims of the scam.