Widespread Harassment from Phony Debt Collectors Raises Concerns of Mass Data Breach, Warns BBB

August 04, 2009

Better Business Bureau is issuing a national alert today about phony debt collectors that are calling consumers nationwide and claiming that they have defaulted on a payday loan and will be arrested if they don’t pay immediately. Claiming to be lawyers, the scammers say they are with the “Financial Accountability Association” or the “Federal Legislation of Unsecured Loans” and are equipped with a disconcerting amount of personal information about their potential victims. 

“Because the scammers have so much information about potential victims, BBB is concerned that this may be the result of a data breach,” said Kim States, BBB spokesperson. “Thousands of people may have had their personal information compromised, and given the scammers’ tactics, it appears that those who have previously used payday loan services could be particularly at risk.”

According to reports received by BBBs across the country as well as online postings, the scammers accuse the victim of defaulting on a payday loan and claim they are being sued. The phony debt collector threatens that, if the victim doesn’t pay as much as $1,000 immediately via wire or by providing bank account or credit card numbers, he or she will be arrested and extradited to California within the hour to stand trial. The scammers often have the victim’s Social Security, old bank account numbers or driver’s license numbers as well as home addresses, employer information and even the names of personal friends and professional references.  

BBB offers the following advice to consumers if they receive a suspicious telephone call about an outstanding debt:
• Ask the debt collector to provide official documentation which substantiates the debt.
• Do not provide or confirm any bank account, credit card or other personal information over the phone until you have confirmed the legitimacy of the call.
• File a complaint with the Federal Trade Commission online if the caller is abusive, uses threats or otherwise violates federal telemarketing laws.
• Contact your BBB at 520-888-5353 or info@tucson.bbb.org if you believe a debt collector is trying to scam you.

According to complaints online, phone numbers that the scammers are calling from include: 949-468-5107, 415-200-0274, 415-200-0274, 213-784-5745, 408-715-1614 and many others.