Accounts Receivable Management Featured Article

FTC Cracks Down on Fake Debt Collector

October 31, 2012

Debt collectors are the cause of more complaints to the Federal Trade Commission (FTC (News - Alert)) than any other industry.  Many engage in illegal conduct, although most debt collectors are careful to comply with consumer protection laws. Some collectors demand larger payments than the law allows, harass and threaten consumers, disclose debts to consumers’ employers, refuse to verify disputed debts and often reveal the debts to coworkers, family members and friends. Debt collection abuses cause harms that financially vulnerable consumers can ill afford.

In such a case, the FTC cracked down on a California man who partnered with bogus debt collectors in India. After legal proceedings, this man has agreed to settle FTC charges regarding the same. According to the FTC, Varang K. Thaker, American Credit Crunchers, LLC, and Ebeeze, LLC, and his companies conned and intimidated consumers into paying debts that were not owed by them.

In some cases, although the defendants owed loans, these people were not authorized to collect them. Now, after the crackdown by the FTC, the defendants will turn over nearly all of their assets. This amounts to about $170,000, and the FTC has stated that this amount will be utilized for consumer refunds.

Varang K. Thaker joined hands with Indian call centers to make calls to customers who had either enquired about or actually taken a payday loan. They then threatened the victims that they would be arrested or retired from their jobs if they did not pay up.  

Recently, the FTC released its “Facing Facts” staff report, which offers recommendations on best practices for using technology. With many experts agreeing that companies should implement privacy protections from the detection to the authentication process, use of facial recognition technologies is advised in the report. Apart from increasing consumer education about the use of such technology, they also recommend that companies increase the transparency of their data practices, develop security precautions for the information collected.




Edited by Rachel Ramsey

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