Fake Payday Loan Debts

In September 2015, the Federal Trade Commission banned Kirit Patel and his company, Broadway Global Masters, from the debt collection business. Patel and his company illegally collected more than $5.2 million in fake payday loan debts. He also pleaded guilty to the Department of Justice on charges of criminal mail and wire fraud. Specifically, Patel’s company:

Called people and pushed them to pay debts they didn’t really owed,
Posed as law enforcement and fake government agencies like the “Federal Crime Unit of the Department of Justice”,
Threatened to sue or arrest people—or tell their family and employers about a debt, and
Recited people’s Social Security and bank account numbers to seem legit.

So how can you tell if you’re being targeted by a fake debt collector? A caller may be a fake debt collector if:

You don’t recognize the debt,
You can’t get a mailing address or phone number for the collector,
You’re asked for personal financial or sensitive information, and
You’re threatened with arrest or told you’ll be reported to a law enforcement agency.

For more information, click here.

Teaching Suggestions

Ask students to prepare a list of steps they should take if they receive a call from a debt collection agency.
Encourage students to visit a local office of the Consumer Credit Counseling Service. What assistance is available if the debt is legitimate, but the debt collector is not?

Discussion Questions

What can governmental agencies do to stop scammers from bilking honest and innocent people?
Why is it important to obtain and review your free credit reports at least once a year?