WASHINGTON—The FTC has taken action against operators of a fraudulent debt collection scheme who collected millions in “phantom” payday loan debts.
The debt collection operators will be banned from the debt collection business under an FTC settlement to resolve charges that they illegally processed more than $5.2 million in payments from consumers for payday loan debts they did not owe.
The settlement resolves a complaint the FTC filed against Kirit Patel, Broadway Global Master Inc., and In-Arabia Solutions Inc. in 2012, alleging that callers working with the defendants harassed consumers into paying on bogus debts, often pretending to be agents of law enforcement or fake government agencies such as the “Federal Crime Unit of the Department of Justice.” The court subsequently halted the operation and froze the defendants’ assets pending litigation.