The Federal Trade Commission (FTC) recently began Operation Collection
Protection, a plan to shut down phantom debt collection schemes running
rampant across the country. These schemes trick consumers into paying
debts that they do not know.
So far, the FTC has filed a lawsuit against six companies and three individuals.
These people and entities used businesses with names like Stark Law, Stark
Recovery, and Capital Harris Miller & Associates to run a boiler room
operation that harassed consumers nationwide into paying off debts that
did not belong to them. They would also sell fake debts to debt collection
companies, that would also begin hounding consumers for these fake debts.
The FTC claims that this scheme has earned the companies over $3.8 million
since 2011. While the companies were mostly based in the Midwest and in
California, they were able to convince over 1,000 people around the country
into paying off fake debts.
Often, the scammers received a consumer’s information when he or
she applied for an online payday loan. Many of these websites offered
loans for people with bad credit or no credit, and promised quick and
easy cash. However, these websites were also fake, and were created to
steal consumer information from the internet.
People who were contacted by these companies reported that the callers
told them that they had an outstanding debt, and would be hit with a lawsuit
if they did not pay. Consumers also reported that the debt collection
companies contacted family and friends in order to convince that person
to pay off the phantom debt. In many cases, consumers agreed to make a
payment just to get the harassment to stop.
Phantom debt collection is a growing problem across the country. Last year,
the FTC received over 900,000 complaints about debt collection practices,
many of which involved fake or phantom debts.
If you have been contacted about a debt that you do not believe you owe,
you should ask the debt collector to mail you written proof of the debt.
Legitimate debt collectors must provide this information to consumers.
Additionally, consumers should check their credit reports for any evidence
of the debt. If debt does not appear on any of the person’s credit
reports, then it is probably not legitimate.
After you request verification of the debt or review your credit report,
contact the attorneys at Loan Lawyers. We can help you determine whether
or not you owe the debt, and if you do, we can help you negotiate a resolution.
If you are being targeted by a debt collection scam, we can also help
you fight back by filing a claim against the phantom debt collector.
For a free, no-risk consultation about your legal rights and options, contact
Loan Lawyers today by calling (888) FIGHT-13 (344-4813).