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BBB Tip of the Week: Online payday loan debt collector

A California man at the center of 4,000 complaints to the Federal Trade Commission and state attorney generals’ offices has agreed to settle charges that he and his companies worked with bogus debt collectors in India to deceive and threaten consumers into paying debts they didn’t owe or that the defendants were not authorized to collect.

The FTC’s complaint this spring alleged that callers who worked with American Credit Crunchers LLC and Ebeeze LLC would contact consumers who previously had received or inquired about online payday loans. Often pretending to be the local police department, the “Federal Department of Crime and Prevention,” or simply “a federal investigator,” the FTC says callers would falsely threaten to immediately arrest and jail consumers if they did not make a payment on a supposedly delinquent payday loan, demanding on average $300, but sometimes as much as $2,000.

At other times, the callers claimed to be filing a lawsuit, or threatened to have the consumer fired, according to the FTC. But the payday loan debts did not exist or in some cases, defendants had no authority to collect, because they were owed to someone else, the FTC alleged.

This type of call is among the most distressing that we hear reports of at the BBB. If you get a call like this, know that the red flags of a phony debt collector include:

• They are seeking payment on an unfamiliar debt or loan.

• They won’t give you a mailing address or phone number.

• They threaten to have you arrested or fired.

That’s not how it works. Hang up and call your BBB office or contact the Federal Trade Commission. It is our understanding that legitimate debt collectors must:

• Contact you in writing if you request it, providing full details of the debt.

• Refrain from threatening, harassing or abusing you.

• Not contact you at work if they know your employer doesn’t approve.

• Allow you to dispute owing the debt within 30 days of being contacted (do this in writing and keep a copy).

• Cease all collection efforts unless and until they can prove you do owe.

And much more. To learn more about your rights, read the FAQs about the Fair Debt Collection Practices Act from the FTC ( consumer/credit/cre18.shtm).

More info or to report scams: Visit the BBB website at Call (509)455-4200 or (800) 356-1007.

Holly Doering, BBB editor

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