Defendant pays the price for selling fake consumer debt portfolios
Debt buying is big business. That’s the sale of old debt, for pennies on the dollar, by creditors to buyers who then attempt to collect the debt or sell it to other buyers.
But when a person or company sells fake debt portfolios, that’s fraud. And that’s what the FTC alleged happened in an elaborate scheme carried out by Joel Tucker and three corporations he controls.
According to the FTC, Tucker sold what were supposed to be payday loan debts – but actually, the debts were fake. Tucker’s counterfeit portfolios consisted of spreadsheets that listed real people’s names, contact information, and Social Security numbers. In truth, the people listed in the portfolios didn’t owe those debts. In fact, some of the payday lenders that supposedly made the loans didn’t even exist – Tucker simply made them up.
When debt collectors began making calls to the people on the list, many denied ever receiving loans listed in the portfolios. As in other FTC enforcement actions involving phantom debt, some people agreed to debt collector demands for payment even though the debts were fictitious. Some people made payments because the collectors could support their demands by reciting sensitive information about them, like Social Security numbers and financial account numbers. Others paid simply to stop the debt collection calls.
If a debt collector calls you about a debt – and before you agree to pay anything – ask for a validation notice that says who originally gave you the loan. By law, debt collectors have to send you a validation notice in writing, within five days of contacting you. If they don’t, that’s a red flag. And if a debt collector threatens, harasses or intimidates you into paying a debt, that’s illegal, too. Report it to the FTC.