The Federal Trade Commission said Oct. 23 that it reached a settlement with Varang Thaker, a California man who it claims worked with fake debt collectors in India to trick and threaten consumers into paying debts that were not owed or that he was not authorized to collect.
The settlement bans Thaker, American Credit Crunchers LLC and Ebeeze LLC from collecting debts and from pretending that they belong to a government or non-profit group. They must turn over nearly all of their assets, about $170,000, which will be used to reimburse consumers.
According to the FTC, consumers received millions of these calls from India and the operation took in more than $5 million over two years.
The settlement also includes a $5.4 million judgment, but the FTC said that will be "partially suspended" because the defendants don't have the money to pay it.
The FTC complaint claimed that the callers who worked with Thaker would contact consumers who previously had received or inquired about online payday loans. The callers would often pretend to be law enforcement or other government authorities and threaten to arrest and jail consumers if they didn't agree to make a payment on a supposedly delinquent loan.
The callers usually demanded more than $300, and sometimes as much as $2000. The callers also sometimes claimed to be suing the consumer, or threatened to have them fired. But the loans didn't exist, or were owed to someone else.