Scam of the day – April 11, 2016 – FTC sending refunds to victims of fake debt collectors

The Federal Trade Commission (FTC) has settled its complaint against Kirit Patel and two companies he operated, Broadway Global Master Inc. and In-Arabia Solutions regarding bogus debt collection practices. People seeking personal loans will often turn to online companies, many of which are somewhat less than reputable.  The information supplied by the people applying for these loans including Social Security numbers, bank account numbers and other personal information was accessed by Patel and his companies who then contacted their victims by phone, sometimes posing as federal agents of the non-existent “Federal Crime Unit of the Department of Justice” and threatened their victims with prison and other consequences if they did not pay the caller for debts that did not even exist, but sounded legitimate because the caller had such personal information about the victim when the scammer called.  As a part of the settlement with the FTC, checks averaging $350.39 will be sent by the FTC to the victims of this scam.  For more information about the refunds go the tab at the top of this page entitled “FTC Scam Refunds.”

Patel has also pleaded guilty to criminal charges related to this scam and has been sentenced to a year in prison.

TIPS

If you were a victim of this scam and receive a check from the FTC, you must cash the check within sixty days of the date of the mailing.  You do not need to provide any personal information or pay any fee in order to be eligible for this refund.  Anyone asking for such information or asking for such a fee is just another scammer.

Subject to strict federal laws, legitimate debt collectors are permitted to call debtors, however, the law prohibits them from threatening imprisonment for the failure to pay a debt.  It can be difficult to know when someone calls attempting to collect a debt if indeed they are legitimate or not, so the best course of action if you receive such a call is to not discuss the debt with the person calling, but instead demand that they send you a written “validation notice” by regular mail which describes the debt they allege you owe and includes a listing of your rights under the Federal Fair Debt Collection Practices Act.  Never give personal information over the phone to anyone who calls you attempting to collect a debt.  You can never be sure who they are.  If you receive the validation notice and it appears to be legitimate, you may be better off contacting your creditor directly because the person who called you may not be representing the creditor, but may merely have information about the debt.

2 thoughts on “Scam of the day – April 11, 2016 – FTC sending refunds to victims of fake debt collectors”

    1. They are not the same company I wrote about in the Scam of the day. They just have a similar name.

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