CHICAGO (Legal Newsline) – A federal court, at the request of the Federal Trade Commission and Illinois Attorney General Lisa Madigan, temporarily halted an alleged scheme to threaten and intimidate consumers to collect phantom loan “debts” not actually owed.
“It’s illegal to harass people to pay debts they clearly don’t owe, and to sell phony debts to other debt collectors,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said. “We’re proud to partner with the Illinois Attorney General to halt these egregious debt collection practices.”
Six companies and three individuals have been charged. The individuals have used names such as Stark Law, Stark Recovery and Capital Harris Miller & Associates.
“Phantom debt collection is one of the most brazen scams today,” Madigan said. “With the FTC, we are working to protect consumers by shutting down these scam operations.”
According to the complaint, the defendants have allegedly targeted consumers who obtained or had applied for a payday loan since 2011. The defendants purportedly pressured these consumers into paying debts that they either did not own or that the defendants had no authority to collect.
The FTC charges that the defendants would threaten consumers with lawsuits or arrest. Additionally, it claims that the defendants harassed consumers with improper phone calls and would even disclose the debt to relatives, friends and co-workers in an effort to get the consumers to pay up.