Madigan has issued a consumer alert warning people to be on the lookout for scammers posing as payday loan debt collectors. They call and threaten either a lawsuit or even arrest unless a payment is made. The state has seen a rise in consumer complaints of these bogus collection calls in recent weeks. In most cases, the callers already have some personal information about the consumer, including a place of employment and Social Security number. They also say they have the consumer's bank account number on file and ask to confirm the number.
Madigan says the scammers use a variety of business 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. Most of the names are fake, but some like CashNetUSA are real businesses.
CashNetUSA has posted a warning on its website about these scam calls and says it is not connected to the calls. The company urges its customers to contact their state's attorney general's office or the U.S. Federal Trade Commission if they get one of these calls.
Illinois consumers aren't the only ones getting harassed by these scam calls. Reports of these calls have surfaced in Ohio, Colorado, Florida, Indiana and elsewhere around the nation.
Madigan gave the following advice on how to handle such calls:
- You cannot go to jail for failing to pay a debt.
- File a complaint with the state attorney general's office if you are threatened in any way by the debt collector.
- Do not give out any personal information over the telephone.
- Ask the debt collector to provide you with documentation that substantiates the debt.
- Contact the original creditor and ask whether the debt has been paid. If it has not, ask if the debt was sold to a third party collector before making a payment.