Chicago - Scam artists posing as collectors of payday loan debt are calling consumers and threatening legal action unless the victims authorize payments from their bank accounts, the Attorney General's office is warning.
In recent weeks, the AG's office has seen a rise in consumer complaints about bogus collection calls, most from consumers who have taken out payday loans in the past, usually online, but paid them off. In at least one case, the consumer filled out an online loan application but never completed the process.
Victims report the calls seem to originate from outside the United States. Often, the fake collector already knows some personal information, such as name, Social Security number and place of employment, which can lead the consumer to believe they are dealing with a legitimate collector. Scammers usually have the consumer's bank account information on file and ask them to confirm its accuracy.
The con artist may also claim to be affiliated with a law enforcement agency. In almost every case, they threatens the victim with legal action, including a lawsuit or arrest, if they don't make a payment right away, the release said.
The scammers then ask them to authorize a direct withdrawal from their checking account or sign a promissory note and submit it by fax. Some victims paid hundreds of dollars before realizing they'd been scammed.
The bogus collectors use a variety of names, including: Morgan & Associates, Federal Bureau of Investigators, DNR Recovery, DNI Recovery, Legal Accounts Association, Department of Law and Enforcement, CashNet USA, America Legal Services, Quick Cash, and ACS.
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