Authorities Arrest Owner, Six Employees Of Debt Collection Group That Scammed $4.1M From Consumers

(Alan Bruce)

We’re no stranger to the shady tactics that debt collection companies use to pry money from consumers. But the latest scam to be shut down by U.S. authorities might be one of the most egregious we’ve ever seen.

Reuters reports that criminal charges were filed against a Georgia collection agency, its owner and seven employees for their alleged part in running a scam that bilked $4.1 million from 6,000 consumers over a five-year period.

Williams Scott & Associates are accused of wrongly threatening people with arrest, using aliases and trying other tricks to collect million of dollars in fake payday loan debts from consumers, a federal complaint filed in Manhattan federal court states.

Employees with the company allegedly impersonated FBI agents, U.S. Marshals, sheriffs and Justice Department employees as a way to collect debts.

Callers used aliases such as “Mr. Cline” and “Investigator Ace Rogers,” telling victims that the “national check fraud center” had filed complaints against them and that they would face jail time if they didn’t pay up, the complaint states.

WSA also allegedly emailed bogus “government” documents purporting to show consumers owed money or were being sought on a warrant.

In order to sound convincing, Reuters reports, the company’s employees read from a script containing phrases such as “failure to respond will lead to criminal charges being pursued,” and “it’s a Class A felony pending against you for theft of property.”

During the five-year scheme, the company reportedly used 87 phone numbers, switching when a number received too many complaints.

The company’s owner, John Williams, along with six employees were charged with conspiracy to commit wire fraud in connections with the scheme.

Manhattan U.S. Attorney Preet Bharara tells Reuters that the case is an example of “an absolute epidemic of abusive debt collection practices.”

Bharara says he has contacted federal agencies, including the Consumer Financial Protection Bureau and the Federal Trade Commission, to bring about more cases as part of a broad crackdown of deceptive debt collection practices.

WSA previously agreed with the FTC to stop collecting allegedly fake payday loan debts.

UPDATE 1-U.S. says debt collector cheated 6,000 people in scheme [Reuters]

by Ashlee Kieler via Consumerist