Phony Indian Debt Collector Scam

This scam originally targeted borrowers in the United States but has been used in other countries. Victims are those who use or used payday loans, pawn your title loans, or variations of such short term loans. Preventing the scam is easy if you know who you owe money to.

Consumers received millions of collection calls from India, and since January 2010 the operation took in more than $5 million from victims, according to the FTC. This scam speaks to the fact that valid debt collectors, corporate customer service, and help line employees are in India these days. Sadly, we are used to that.

This scam was operated by Indian criminals pretending to be law enforcement officers. Consumers who applied online for payday loans were the victims. Callers working with the defendants would falsely threaten to immediately arrest and jail consumers if they did not agree to make a payment on a delinquent payday loan.

Why the scam works:

Whether the offending website was valid or a phishing scheme is not known as I write this article. What is known is that people were applying online for a payday loan. While doing so unsuspecting potential borrowers indicated that the payday loan would be used to pay off an existing payday loan. That opened the door to these Indian payday loan scammers.

Consumers did not owe money to the scammers – either the payday loan debts did not exist or the defendants had no authority to collect them because they are owed to someone else, according to the FTC.

Questions about this scam:

How can a bunch of scammers from India actually collect $5 million on debt that did not exist? In truth that was only a small part of the $5 million phony debt collector scam. Most of the money came from those who had valid payday loan debt, some of whom were delinquent or had other things to hide. Those who were scammed thought the calls were valid.

Real case examples:

The case of “MM” is typical of consumers the defendants targeted. A caller with an Indian accent reached his wife at home and told her that her husband would be arrested and immediately imprisoned if he did not pay what he owed on a payday loan. The caller later said he knew where her husband worked and threatened to send police there to arrest him. Despite not being delinquent on any loan and not owing money to the caller, the man was afraid of the threatened arrest, so he paid $523.87 to the defendants.

As part of its continuing crackdown on scams that target consumers in financial distress, 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.