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Phony Debt Collectors Threaten Consumers With Imprisonment

Michael Agruss

Written and Reviewed by Michael Agruss

  • Managing Partner and Personal Injury Lawyer at Mike Agruss Law.
  • Over 20 years of experience in Personal Injury.
  • Over 8000+ consumer rights cases settled.
  • Graduated from the University of Illinois Chicago School of Law: Juris Doctor, 2004.

With over 30 million Americans in debt, the collection agency business is employing the most aggressive tactics since debtors’ prison; in some ways, debt collectors are bringing back this hated 19th century institution, by using the US Court system to lock up citizens with private debts. In more than a third of US states, debt collectors are allowed to petition debtors in court, and if the latter party fails to show up, bench warrants are issued. This has caused phone debt collectors to threaten consumers with imprisonment.An unfortunate side effect of this growing trend is the emergence of phony debt collectors threatening people with imprisonment. One especially chilling recent case involved a California man working with fake debt collectors in India; the Federal Trade Commission says the scam artists, who went by the name American Credit Crunchers, pulled in over $5 million in just two years. The FTC filed a criminal complaint against the bogus company in February; by this time, there had been more than 4,000 consumer complaints, which demonstrates the large scale of the operation.Although American Credit Crunchers is no more, similar scams are still thriving. Scammers tend to prey on people in financial trouble, and especially those who have applied for and/or taken out payday loans. Via moderately sophisticated computer hacking, the phony debt collectors can obtain a lot of private information from consumer’s electronic applications to multiple payday loan websites, which the phony collectors then present to people over the phone, to intimidate them into paying a nonexistent debt.But there are ways to tell, immediately, whether or not the debt collector is legitimate. First of all, you should always request a written “validation notice” of the debt; this is required under the Fair Debt Collection Practices Act (“FDCPA”), and if the caller refuses to provide one, hang up. Another sign that you’re being scammed is if the “debt collector” threatens you with physical harm or imprisonment; neither are allowed under the FDCPA. Imprisonment, as noted earlier, is becoming more popular, but there is a process leading up to this point, including the court summons (which is always mailed or delivered); a collection agency can’t just send the police to your door for a private debt. Unfortunately, people have been fooled this way; the FTC has reported than one man paid over $500 to a scam artist who threatened him with impending imprisonment.Another red flag that you you’re being conned is the method of payment demanded; if the debt collector is asking for a money transfer, via Western Union or Moneygram, the caller is not legitimate. Real collection agencies want a credit card number, debit account, or check.A final way to protect yourself is to keep on top of your finances; if you know you have no outstanding debt, you can confidently hang up on the caller and report the scam artist to the proper authorities. If you do have debt, stay apprised of the amounts and agencies involved, and don’t give out too much information via payday loan applications. You can also call the original creditor to find out if your account was turned over to a collection agency, as well the amount owed at that point, and relevant dates.If a collection agency has harassed you, you may be entitled to money damages up to $1,000.00, based on the FDCPA, which has been around for almost 35 years. The FDCPA is a federal law that applies to every state. In other words, everyone is protected by the FDCPA. The FDCPA is essentially a laundry list of what debt collectors can and cannot do while collecting a debt, as well as things debt collectors must do while collecting a debt. Plus, the FDCPA has a fee-shift provision. This means, the collection agency pays your attorney’s fees and costs. Founding attorney, Michael Agruss, has settled over 1,500 debt collection harassment cases. Contact Mike Agruss Law, at 888-572-0176 for a free consultation. We want to help you, too.

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