Con artists posing as payday loan collectors are using threats of going to jail and other scare tactics to coerce Illinois consumers into opening up their back accounts.
Illinois Attorney General Lisa Madigan says her office has seen a rise in complaints about these fraudulent collection calls.
Many consumers targeted in the scheme complain they've taken out payday loans before -- usually from online lenders -- but have paid off the debt. They say the con artists often know their names, social security numbers, place of employment, and bank account numbers -- information that leads them to believe they're dealing with legitimate debt collectors.
The con artists also claim to be affiliated with official-sounding companies or law enforcement agencies, including: the Federal Bureau of Investigators, Department of Law and Enforcement, Morgan & Associates, DNR Recovery, DNI Recovery, Legal Accounts Association, CashNet USA, America Legal Services, Quick Cash, and ACS.
"Although many of these names are fake, some are names of legitimate businesses that the purported debt collectors may be using without permission," Madigan said in a press release.
Threats and intimidation
Victims of the scheme say the scam artists use threats and intimidation to force them into sending hundreds of dollars.
"In almost every case, the bogus collector threatens the victim with legal action, including a lawsuit or arrest, if they don't make a payment right away," Madigan said. "The scammers attempt to force victims into an immediate payment and ask them to authorize a direct withdrawal from their checking account."
In some cases, consumers are asked to sign promissory notes and fax them to the phony collectors.
Madigan, however, said consumers can protect themselves from getting taken in this fake debt collection scheme by remembering:
They can't go to jail for failing to pay a debt;
Debt collectors cannot threaten them. If they do, hang up and file a complaint with the Attorney General's office;
To never give out personal information over the telephone, including bank account numbers or credit card numbers;
To ask debt collectors for written documentation that verifies the debt they're trying to collect;
To contact the creditor and verify the debt has been paid. If it's not, ask the company if it's sold the debt to a third party collector.
Illinois consumers who've received calls from fraudulent debt collectors can file complaints online with Madigan's office. Consumers can also contact Madigan's Consumer Fraud Hotline at one of the following numbers: Chicago 1-800-386-5438, Springfield 1-800-243-0618, Carbondale 1-800-243-0607.