Fake Payday Loan Collector Scam Continues

By Christopher Maag

I received a call from Maria Brown of Houston, TX, who’s getting threatening phone calls from fraudsters pretending to be debt collectors.

“They contacted me and really had me believe I was going to jail for check fraud,” Brown says.

How can I tell these guys are scammers? First, they keep threatening Brown that she’s about to get arrested for not paying off a payday loan. Even threatening arrest is illegal, and legitimate credit collection companies never do it anymore, as we’ve reported in previous stories.

Second, the callers claim to be from a company named American Credit Legal Services, a variation of the name used by scammers reported by the Illinois Attorney General’s office. The scammers appear to have access to real payday loan applications, because in many cases they harass people who actually did apply for such loans.

[Infographic: What to do if a Debt Collector Calls]

Brown filled out applications for payday loans from Advance America and Ace Express. That’s why she worried that maybe the scammers were telling the truth. It was only after she did a little research into her own financial documents that she found she actually had paid off both loans, and that the phone calls were coming from fraudsters.

“I got so scared because I actually did take out a payday loan,” she says.

In addition to variations of the name American Credit Legal Services, Illinois Attorney General Lisa Madigan says beware of these companies: Morgan & Associates, Federal Bureau of Investigators, DNR Recovery, DNI Recovery, Legal Accounts Association, Department of Law and Enforcement, CashNet USA, Cash, and ACS. Some of them are real companies whose names scammers have appropriated. Others were created exclusively by fraudsters.

“(T)hese complaints involve outright con artists, not innocent mistakes by legitimate debt collectors,” according to a press release by Madigan’s office.

[Resource: Get Your Free Credit Report Card from Credit.com]

Image: mollybob, via Flickr.com

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.