The jig is up for bogus debt collection and rate reduction operations
The FTC continues to crack down on fake debt collection and credit card interest rate reduction scams. We recently obtained a court order that imposes a $25.3 million judgment against the mastermind of two schemes that bilked consumers out of millions.
In the first scheme, the FTC alleged the scammers set up U.S.-based financial accounts for a call center operation based in India. The call centers unfairly collected payday loan debts from people who did not owe them, or owed them to someone else. The operation’s callers used threats, lies, and abusive tactics — all of which are illegal — to collect debts from people who applied for payday loans online. Those people’s sensitive financial information later found its way into the hands of the scammers.
If you think that a caller may be a fake debt collector:
- Ask the caller for his name, company, street address, and telephone number.
- If a caller refuses to give you all of this information, do not pay!
- Stop speaking with the caller.
- Do not give personal financial or other sensitive information.
- Contact your creditor. Read Debt Collection for a list of your rights.
- Report the call to the FTC and your state Attorney General's office.
In the second scheme, the culprits falsely claimed that, for a fee of hundreds of dollars, they could negotiate significantly lower interest rates with consumers’ credit card issuers. The truth is, you have just as much clout with your credit card issuers as a company negotiating for you. You may get turned down for a rate reduction despite their promises.
If you’re having problems with debt or simply want some free tips to help you better manage your money, check out Money & Credit.