Court Cracks Down On Payday Lenders

Imagine receiving intrusive and threatening phone calls concerning payday loans that you never even took.  That’s precisely the circumstance that prompted the Federal Trade Commission to petition a U.S. District Court in Atlanta in July 2014 to issue an injunction against John Williams and his Atlanta based operations.  According to the FTC, Williams; Williams, Scott & Associates, LLC; and WSA, LLC used false claims and threats to bully consumers across the United States and collect $3.5 million in payments for payday loans the victims never actually took.

Haunted by Phantom Debt

fearThe victims may have unwittingly set themselves up by making online inquiries about payday loans, even without actually ever receiving any loans. At some point, one or more websites they visited possibly failed to implement proper security and privacy procedures to protect the personal information of visitors to the site. Or unscrupulous website operators could have outright sold visitors’ information to marketers and sham debt collectors. Either way, their information fell into the hands of Williams and his associates – who proceeded to extort money from the victims.

According to the FTC, Williams and his accomplices made false claims in their attempts to intimidate victims into paying up. Williams and his workers fraudulently claimed to be government fraud task force members, law enforcement officers and attorneys.  They threatened victims with the loss of driving privileges, arrest and imprisonment if they refused to “cooperate” – that is, pay up.  The perpetrators also allegedly used profanity with victims; persisted in making calls even after being instructed to stop and refused to present written verification for the “debts” they claimed to be collecting.

FTC Cease and Desist Orders

phoneThe FTC claims Williams and his workers violated the Fair Trade Commission Act and the Fair Debt Collection Practices Act. Both regulations place restrictions on the conduct of legitimate debt collectors and outlaw unscrupulous collection practices perpetrated by Williams and his company. The FTC has also pursued legal action against American Credit Cruncher, LLC; Broadway Global Master Inc.; Pro Credit Group; Vantage Funding, aka Caprice marketing and Pinnacle Payment Services, LLC.  In addition to granting the FTC’s request for cease and desist orders against Williams and his firm, courts have frozen he court froze the companies’ financial assets.  The FTC plans to use the funds being held to repay victims who had fallen for the scam and had made payments.

Spotting a Phantom Debt Collector

debtPhony lenders and scam debt collectors can be convincing. Because they have obtained access to your personal information, they can provide details about your finances that would ordinarily only be available to legitimate merchants or collectors. But if you recognize any of the following factors when you receive a call, the chances are good that you are dealing with a fraud artist.

  • Pursuit of payments for debts or loans you don’t recognize
  • Refusal to provide a mailing address or telephone number
  • Demands for personal or sensitive information
  • High pressure tactics or threats such as references to arrest warrants

To protect yourself from such scams, your first move should be to end the discussion with the other person on the line. Just hang up. If you’re worried that the call may be related to a legitimate debt, contact your creditor(s) and explain the circumstances.  Follow up with a written demand for collection efforts to stop contacting you.

Do not provide personal or sensitive financial information if you are at all unsure about the person on the other end of the call. Legitimate creditors and collectors should already have the information they need. If a so-called debt collector seems to be on a fishing expedition, beware. You may actually be dealing with an identity thief. If you’re convinced that the caller is fraudulent, contact the FTC and the attorney general in your state. Your report could help take these unscrupulous operators out of circulation.

Stopping Calls Does Not Equal Erasing Debt

Payday-LoansGenuine debt collectors will stop harassing you immediately upon receiving written instructions. Of course, you’ll still owe the money, so you should make other arrangements to pay what you owe. If you do not, your creditors may pursue legal action against you, including garnishment, judgment or foreclosure.