Consumer Finance Insights
November 20, 2015

Employees and Owners of Debt Collection Company Indicted on Federal Criminal Charges

On October 27, 2015, the United States Attorney’s Office for the Southern District of New York announced the indictment of fifteen individuals in connection with a nationwide debt collection operation. The Defendants operated a large debt collection company that allegedly collected debts from consumers who had defaulted on payday loans and credit card debts. The Defendants allegedly employed a variety of abusive, coercive and fraudulent collection tactics. According to the indictment​, the Defendants told consumers:


  • The company was affiliated with various governmental or law enforcement agencies, including the local district attorney’s office.
  • Consumers had committed federal crimes, including wire fraud and check fraud, when they defaulted on their payment obligations.
  • Consumers were at risk of arrest or civil lawsuits related to unpaid debts.
  • Consumers were at risk of having their driver’s licenses suspended.
  • That the company was part of a law firm retained to collect unpaid debt.

​The company also allegedly created fictitious legal documents designed to coerce consumers into making payments, and in some cases allegedly inflated the amount of debt consumers owed to obtain larger payments. The company also allegedly falsely represented that it was collecting debts on behalf of a payday lender that was not associated with the company. According to the United States Attorney’s Office, the company collected approximately $31 million in payments from consumers across the United States. The United States Attorney’s Office stated that the case is “believed to be the largest fraudulent debt collection scheme ever to be prosecuted.”