‘Call centres in India used to defraud Americans of millions’

“This is a brazen operation based on pure fraud,” said David Vladeck

Written by Press Trust Of India | Washington/ New York | Published: February 23, 2012 1:20:22 am

The US has cracked down on a California-based company that bilked $5 million using call centres in India by making fake,often threatening,debt collector calls to over 10,000 customers in the country.This is the first case of its kind that has come to light in the US wherein call centres in India have been used to make fake debt collection calls to the US.

In a complaint,the Federal Trade Commission (FTC) said consumers received over 20 million collection calls from India,and that since January 2010 the operation took in more than $5 million from victims,with collectors demanding between $300 and $2,000 per call.

“This is a brazen operation based on pure fraud,” said David Vladeck,Director of the FTC’s Bureau of Consumer Protection. The FTC alleges information submitted by consumers who applied online for these loans found its way into the hands of defendants.

The FTC filed suit against American Credit Crunchers,related company Ebeeze LLC and their owner Varang Thaker. According to the FTC’s complaint,Thaker obtained information — often including Social Security or bank account numbers — about consumers who had inquired about,applied for,or obtained online payday loans.

Thaker worked with telephone callers in India who called consumers using deceptive statements and threats to convince them to pay debts that were not owed or that he was not authorised to collect,the FTC alleged.

He profited handsomely from the scheme,according to documents filed with the court. Thaker has withdrawn tens of thousands of dollars from the American Credit Crunchers and Ebeeze bank accounts,FTC alleged.

“Consumers should not be pressured into paying debt they don’t remember owing. Legitimate debt collectors must provide consumers with both written information about the debt,” Vladeck said.

According to the complaint,Thaker and his companies falsely told consumers they were delinquent on a loan,they must pay it,and the defendants had the authority to collect it; and falsely claimed to be law enforcement authorities or attorneys.

Thaker and his companies made false threats against consumers who refused to pay the alleged debts,including threats of arrest or imprisonment and harassed consumers so that they often paid the alleged debts out of fear of being arrested or sued.

Often pretending to be law enforcement authorities,like “Federal Department of Crime and Prevention,” or simply a “federal investigator,” the callers working with defendants would falsely threaten to immediately arrest and jail consumers if they did not agree to make a payment on a delinquent payday loan,the FTC’s court papers stated. The callers typically demanded more than $300,sometimes as much as $2,000.

At other times,the callers said they were filing a large lawsuit against the consumer because of the delinquent payday loan or would have the consumer fired from his or her job,according to the FTC. FTC said,the consumers did not owe money to defendants — either the payday loan debts did not exist or the defendants had no authority to collect them.

The court order stopped the illegal conduct and freezes the operation’s assets while the FTC moves forward with the case. FTC said the case of Mark Merola is typical of consumers the defendants targeted.

A caller with an Indian accent reached his wife at home and told her Merola would be arrested and imprisoned if he did not pay what he owed on a payday loan. The caller later said he knew where Merola worked and threatened to send police there.

Despite not being delinquent on any loan,Merola was afraid of the threatened arrest,so he paid $523.87,the FTC said. Over the last two years,consumers have filed more than 4,000 complaints.

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