Tag: payday loan collections


Illegal Payday Loan Company Collects Phantom Debts-FTC

FTC, Illinois Attorney General Halt Chicago Area Operation Charged With Illegally Pressuring Consumers to Pay ‘Phantom’ Debts

The Federal Trade Commission and the Illinois Attorney General’s Office have obtained a court order temporarily halting a fake debt collection scam located in Aurora, Illinois, a western suburb of Chicago. The defendants are charged with illegally using threats and intimidation tactics to coerce consumers to pay payday loan debts they either did not owe, or did not owe to the defendants.

The FTC’s case against K.I.P., LLC, Charles Dickey, and Chantelle Dickey is the agency’s seventh ‘phantom’ debt collector matter.

“This company scared and tricked people into paying debts they didn’t owe,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Working with terrific partners like the Illinois Attorney General, we will keep going after phantom debt scams like this one and shutting them down.”

“The defendants have threatened and intimidated their way into stealing hundreds of thousands of dollars from unsuspecting people all across the country,” Illinois Attorney General Lisa Madigan said. “Between our two offices, we have hundreds of complaints. It is clear they must be stopped.”

According to the complaint, since at least 2010, the defendants used a host of business names to target consumers who obtained or applied for payday or other short-term loans, pressuring them into paying debts that they either did not owe or that the defendants had no authority to collect.

Often armed with sensitive financial information, the defendants would call consumers and demand immediate payment for payday loans that were supposedly delinquent. To pressure consumers to pay, the defendants threatened that they would:

Garnish consumers’ wages;
Suspend or revoke their drivers’ licenses;
Have them arrested or imprisoned; or
File a lawsuit against them.
In response to the defendants’ repeated calls and alleged threats, many consumers paid the debts, even though they may not have owed them, because they believed the defendants would follow through on their threats or they simply wanted to end the harassing phone calls.

The complaint also charges the defendants with failing to provide consumers with a notice containing: 1) the amount of the debt; 2) the name of the creditor to whom the debt is owed; 3) a statement that unless the consumer disputes the debt, it will be assumed to be valid; 4) a statement that if the consumer does dispute the debt in writing, the defendants will verify the debt is correct; and 5) a statement that upon the consumer’s written request, the defendants will provide the consumer with the name and address of the original creditor if different from the current creditor.

Finally, the complaint charges that the defendants: called consumers at work when they knew such calls were prohibited by consumers’ employers; harassed and abused consumers; used obscene or profane language; and called consumers repeatedly with the intent of annoying or abusing them.

The complaint also alleges that the defendants violated the Illinois Consumer Fraud and Deceptive Business Practices Act and the Illinois Collection Agency Act, and that the defendants are not licensed debt collectors as required by Illinois law.

Defendants named in the case include: K.I.P., LLC; Charles Dickey, individually and as an owner, member, or managing member of K.I.P., LLC, and also doing business as (d/b/a) Ezell Williams and Associates, Corp.; Ezell Williams, LLC; Excel Receivables, Corp.; Second Chance Financial Credit, Corp.; Second Chance Financial, LLC; Payday Loan Recovery Group, LLC; Payday Loan Recovery Group; Payday Loan Recovery; International Recovery Services, LLC; International Recovery Services; and D&R Recovery. The complaint also names Chantelle Dickey, also known as Chantelle Rudd and Chantelle Williams, as an individual and as a manager of K.I.P.

The FTC and the Illinois Attorney General’s Office appreciate the Aurora Police Department, North Aurora Police Department, Better Business Bureau of Chicago and Northern Illinois, and the U.S. Postal Inspection Service Chicago Division for their valuable assistance with this matter.

Note: Original FTC Press Release


Payday Loan Scum Bag Collectors


Car Title & PDL Training

Payday loan scum Bags Stealing from Legitimate Licensed Payday Loan lenders

Payday loan lender Advance America is pissed off about unscrupulous call center bill collectors calling borrowers, posing as employees of Advance America and threatening these borrowers with jail time if they don’t pay up quick!

These call center scammers gain access to lists of consumers at black listed websites; often gaining employer, bank account and social security information. Then, it’s simply a matter of dialing for dollars.

“This is Bobby at Advance America. I need you to wire me $300 immediately of you will be arrested and jailed.”

These scumbags often use the names of well known payday loan companies like Advance America to create a sense of legitimacy in the mind of the borrower.

Borrowers who suspect they are being “had” by these scumbags” should visit: http://www.onlinelendersalliance.org/default.asp?page=OLASeal and report any suspicious activity. OLA will attempt to help you.

Tips from OLA for borrowers:

  • Never borrow more than you can afford.
  • Avoid taking out loans with multiple lenders.
  • Get the most bang for your buck.
  • Always remember the website you got your online, short-term loan from.
  • Keep any paperwork, emails, contacts and other information you receive from a short-term lending company.
  • Don’t submit personal information, such as your Social Security number, to companies that are not OLA members.
  • Get credit counseling help.
  • Know who to contact if you think you’re being harassed by illegitimate debt collectors.
  • More Consumer Resources
  • OLA Consumer Hotline
  • Have an issue with a fraudulent lender? Call the OLA Consumer Hotline at 1-866-299-7585 and speak with a live operator who can assist you in reporting fraud and navigating the online lending landscape.
  • Report Fraudulent Debt Collectors Online

“We are very concerned about protecting consumers. Scam artists pretending to be legitimate debt collectors or law enforcement officials are terrorizing consumers, causing unsuspecting victims to lose thousands of dollars. These actions are in direct violation of the Fair Debt Collection Practices Act. OLA has been working with federal, state and local agencies in an attempt to bring these individuals to justice, but we need your help!”

Report fraudulent behavior here: OLA Helpline

Warning Signs Your dealing With a Scum Bag Scammer

Learn the signs of a scam

Debt collectors cannot be abusive, unfair or deceptive in trying to collect a debt. Debt collectors cannot threaten consumers with arrest or jail time if they don’t pay their bill. If someone claims you will face criminal prosecution unless you immediately wire them money, you’re taking to a scumbag collector.

Scammers may also claim that you have been pre-approved for a loan, and then require you to purchase a prepaid debit card or wire money as a “processing fee” or “good faith deposit.” Others may really be identity thieves out to get your personal or financial information.

How to Avoid Scams:

In addition to understanding how lenders and bill collectors can operate, consumers should also take steps to protect themselves, including:

  • Never give personal information such as your Social Security number or bank account information online or over the phone without verifying that you are working with a legitimate lender or bill collector.
  • To verify, call the establishment back using a known number, such as the number listed on your statement or on the back of your credit/debit card.
  • Be suspicious of any email with urgent requests for personal financial information. If an email demands immediate action or makes upsetting or exciting false statements, it’s likely a scam.
  • Verify company licenses when applying for a loan online. Legitimate lenders will display state licenses on their websites to verify that they are full-service, licensed lenders complying with state and federal laws.
  • Never wire money or provide prepaid debit card information to a lender claiming you have been pre-approved for a loan and must make an initial payment as a “show of good faith.”
  • Keep anti-virus, anti-malware, and spam email protection software up to date on all your computing devices.
  • Maintain a record of all outstanding debt, and include lender contact information.
  • Regularly check your bank, credit and debit card statements to ensure there are no unauthorized transactions. Likewise, check your credit report (using Equifax, Experian, or TransUnion) every four months on a rotating basis; credit reports are often one of the first places where signs of identity theft or fraud will appear.
  • If someone approaches you claiming you owe them a debt, demand they provide written proof of the debt as the law requires – especially if it’s for a charge you don’t recognize.

Are you a payday loan lender? Get help running your business here: Payday Loan Bible


Payday Loan Collections: Direct Lender Continues Expansion


[A sponsored listing] Collections / Customer Service Advisors, Nottingham, £17,000 – £19,000 + Excellent Benefits – Have you got excellent communications skills with the ability to develop strong customer relationships? Do you have a positive outlook with the drive, commitment and attitude to build a career with a market leading brand? If so please read on…

Due to our expansion we are looking to recruit a number of Collections / Customer Service Advisors to join us as Collection Account Managers and help support our growth in our Head Office in Nottingham.

Speedy Cash is a leading financial services provider offering personal loans, Cheque Cashing, Money Transfers and Cash for Gold. As a leading Payday Loan Lender in the USA since 1997, we are different and our customers know we’re different. We pride ourselves in offering the kind of service & respect you just won’t find elsewhere.

As our Collections Account Manager you will Continue Reading..



What Keeps You Up at Night?

The CFPB? That State AG’s are after you? Is it the Legislators regulating you out of business? Where do all these issues start from? Consumer complaints. Does every loan you make turn into a complaint? No, complaints only come from consumers who don’t repay the loan on time.

I’m a bill collector. I’ve been doing this for a while too. Started collecting department store checks in Christmas of 1980 – 32 years as a collector, lender, debt buyer, and 17 of those operating the squeaky cleanest collection agency ever.

Guest Post by Steve Hodgdon . Help? Explore? Email Steve!

Short of just forgiving every loan, you’re going to have use some kind of collection method. Pick your poison, outsourcing, calling yourself or selling the accounts to recoup some losses. You’ve already learned they all have their negatives.

Silent Collections

About 3 years after buying my first agency, I had a breakthrough. Not a breakdown, a breakthrough, an epiphany. Clients viewed me as a necessary evil. I was “Guido”, the enforcer, the bad guy. They always took the debtor’s side, even though it was their money! How dare they! So, I turned my techniques upside down. Being a collector is being a salesman. Nothing more. It’s my job to sell you, the borrower, on the benefits of paying your bill. So, here’s your first take away:

  • The money is in the first call. First contact is the best contact. Take your time and “close the sale”.
  • EVERYBODY wants to be heard. Building empathy and recognizing you’re talking to another human being with the same kinds of problems you’ve faced will pay off for both of you. Don’t sympathize; just make sure they know you LISTENED.
  • What’s in it for them? We’re all motivated this way. Why should they pay you? What do you have to give them in return? Every collector should have a positive and negative list to work from.

I promised my agency clients that there would be no complaints – PERIOD. I worked for charity hospitals in some of the toughest, poverty stricken areas. You and I were neighbors! The same consumer who borrowed money from you paid me first. No doubt about it. How? Here’s your 2nd takeaway:

  • My collectors LOVED their job. Careful hiring and lots of hand holding for new hires. We were practically a cult. Folks would leave for greener pastures and come right back.
  • We built a team. We all had each others’ backs. They knew they could count on me.
  • There were achievable goals, public recognition, and contests all the time.
  • Commission Commission Commission. Pay them and they’ll stay.

You should check under the hood… BEFORE the CFPB does!

The regulatory mood is, and always will be, pro-consumer. Look at the FTC settlements over the past year. If AMEX settles for $85 million among many others, seems likely that the door is wide open for more actions.

State regulators and consumer attorneys take their lead from the CFPB and FTC. Federal sanctions play really well in State courts. There’s no need to fear the CFPB if you’re doing things right. You can stop living on the edge and sleep better with some simple steps. Takeaway #3:

  • Google your agency partners.. Do they dominate the debtor boards?
  • Conduct a mini audit. Internally and externally. Listen to 10 calls on paying accounts to start. What, you can’t listen to call recordings? No time? I’ll audit for you.
  • Go to www.webrecon.com. It’s a great database of FDCPA lawsuits. Search your vendors. I scrub every portfolio I buy through this to identify known litigious debtors.
  • Add a layer of protection. Update your 3rd party contracts to include TCPA, GLB, and PCI compliance for starters.
  • Is your complaint resolution process geared toward getting customers back or collecting money? Ask me how client satisfaction leads to better collections, for free!

Ask yourself this – Would you let the agency call customers in YOUR NAME? Do they present your values? Could what they say to a customer be said in person? Is the collector hiding behind an alias, at an untraceable number, with no published address?

Doesn’t Anybody Like Us?

Reputation management can be more than damage control. Remember, CFPB’s view is that you are liable for bad acts performed by agencies. Let’s get ahead of the regulators.

If all your practices treat consumers as YOUR CUSTOMERS, even if they didn’t pay, all these problems go away. I know from personal experience you can generate thank you letters from consumers and improve liquidity at the same time.

Caveat Venditor – “Seller Beware”

Debt buyers should be vetted through the steps above and more. It’s the Wild, Wild West out there. You want to know what happens to your customer post sale. Liability and reputation damage continue forever.

The difference in price between an ethical, insured, licensed buyer and a cowboy is zero. Market price is market price. Choose buyers you’d let coach your kids soccer team.

You can improve your valuation by documenting and adhering to good underwriting rules. As a buyer of payday loans, my hot buttons are frauds and excessive rollovers. Three reference numbers will boost your valuation 10%.

If you do a good job underwriting then the charge-offs will perform better. That leads to a good reputation in the buyer community and a higher price for you. When we take your product to market, telling the story of your excellent verification procedures adds value.

All good buyers want good sellers. Our investors are spending $10,000 to $1,000,000 for good portfolios. We analyze data and get competitive bids in days, not weeks

I personally oversaw agency management of 500,000 payday loans in 2012. Nothing is better than an “in the trenches” knowledge of the consumer, the lender, and the regulatory landscape.

Putting It All Together – Revenue Cycle Management

  • Tune up internal practices. Are you the best payday shop to work at in your market? Let’s start the party!

Examine value add of 1st party outsourcing. Can it be better, faster, cheaper and not degrade your selling value?

  • Set a high bar for agency and buyer qualification. Do business with the best.
  • And, of course, use an experienced guide to get you home safe and sound. In 30+ years, I’ve seen and done everything in the A/R spectrum. Knowing where to look for problems gets you to the solution faster.

Fluff up that pillow and worry about something else.

Need help with your collections? Advice? Counsel? Shoot an email to Steve Hodgdon

What do YOU think? Leave a comment! What’s YOUR biggest challenge TODAY? What does your Team need help with? Jer@TrihouseConsulting.com



Debt Buying and Collections: 2013 FTC Study Released

The FTC just concluded a 2013 study focused on the debt buying industry. If you’re interested, read on. If not, I suggest you blow “outta here now.”

By Jer Ayles-Ayler: A portion of the key findings and executive summary. (We’ve provided a direct link to the entire FTC PDF at the bottom of this POST.)


Buyers paid an average of 4.0 cents per dollar of debt face value.  Analysis of the prices debt buyers paid for debt purchased in more than 3,400 portfolios showed that the average price was 4.0 cents per dollar of debt face value.  Older debt sold for a significantly lower price than newer debt.  The price of debt older than 15 years was virtually zero.  Buyers paid similar prices for debt purchased from original creditors and resellers…


Buyers typically received the information required for validation notices.  Buyers were likely to have received from sellers the information that the FDCPA currently requires that debt collectors include with validation notices at the beginning of the collection process, including the amount of the debt.  They also either received or were likely aware of the name of the original creditor, which the FDCPA requires that they provide to consumers upon written request.

Buyers also typically received additional information that could make validation notices more useful, but they usually did not provide it to consumers.  Buyers also typically received additional information that, if disclosed to consumers, might help consumers assess whether they are the correct debtor and whether the amount of the debt is correct.  This information included the name of the original creditor, the original creditor’s account number, the debtor’s social security number, the date of last payment, and the date of charge-off.

Buyers rarely received dispute history.  Buyers rarely received any information from sellers concerning whether a consumer had disputed the debt or whether the disputed debt had been verified…


Buyers received few underlying documents about debts.  Although buyers received the data file and some other information about the debts, as discussed above, they obtained very few documents related to the purchased debts at the time of sale or after purchase.  For most portfolios, buyers did not receive any documents at the time of purchase.  Only a small percentage of portfolios included documents, such as account statements or the terms and conditions of credit.


Accuracy of information provided about debts at time of sale not guaranteed.  In purchase and sale agreements obtained in the study, sellers generally disclaimed all representations and warranties with regard to the accuracy of the information they provided at the time of sale about individual debts – essentially selling debts, with some limited exceptions, “as is.”  The fact…


Limitations were placed on debt buyer access to account documents.  Buyers were given a defined amount of time (e.g., typically between six months and three years) to request up to a specified maximum number of documents (e.g., equal to 10% to 25% of the number of debts in the portfolio) at no charge.  After that, buyers were given an additional, defined amount of time to request documents for a fee, usually between $5 and $10 per document, with a maximum number of documents again specified.  Debt sellers usually had substantial time, typically between 30 and 60 days, to respond to requests for documents.  Availability of documents not guaranteed.  Most purchase and sale agreements stated that documents may not be available for all accounts.

Additional limitations applied to the resale of purchased debt.  If debt buyers resold debt to secondary buyers, the original creditors typically had no obligation to provide documents directly to the secondary buyers; instead the secondary buyers were required to forward document requests through the original buyers, which sometimes added additional fees and delays.


Consumers disputed 3.2% of debts that buyers attempted to collect themselves.  The data…


About half of disputed debts were reported as verified.  Buyers reported that they had verified 51.3% of the debts consumers disputed.  Older debt…


Some debt was beyond the statute of limitations, though most was not.  Many states have statute of limitations barring lawsuits to collect on a debt after a certain period, typically between three and six years…