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Federal lawsuit exposes massive debt collection fraud

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Consumers in Illinois should beware fake debt collectors that use intimidating tactics to defraud people of money they do not owe. The Consumer Financial Protection Bureau has filed a lawsuit in federal court on behalf of consumers against one group of fake debt collection companies, payment processors and telemarketing firms.

The lawsuit accuses these companies, which used many different names,like Universal Debt & Payment Solutions and Check & Credit Recovery, of robocalling people and demanding payment for debts that did not exist. The scheme convinced some victims because the fake collectors confronted them with personal information, including their names, places of employment, dates of birth and Social Security numbers.

The collectors threatened to inform people's employers, take them to court and garnish wages. The CFPB lawsuit included the telemarketing firms and the payment processors in the lawsuit because they aided the fraudulent operations. These companies illegally collected millions of dollars.

When a person is overwhelmed by demands from debt collectors, they might wish to speak with an attorney. During a consultation, an attorney could inform the person about the laws in place to protect consumers from aggressive collections, predatory lenders and illegal business practices. An attorney might also be able to advise a person on legal ways to achieve debt relief through actions like personal bankruptcy. If filing for bankruptcy is deemed appropriate, then an attorney could arrange for a temporary halt on collections while the person works with a court to discharge debts.