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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
A group of debt collectors are facing a sweeping lawsuit in Michigan federal court that accuses them of running an elaborate “credit identity theft and debt collection scam” targeting consumers across the country. The complaint alleges that the defendants used stolen personal information, impersonated attorneys, threatened litigation, and pressured consumers into paying counterfeit or time-barred debts.
The background: More than a decade ago, the plaintiff took out a small payday loan and eventually paid it off, according to the complaint. The plaintiff’s personal and financial information was subsequently stolen and circulated among multiple phantom-debt operations over the years, according to the complaint.
- The lawsuit claims the defendants acquired that stolen information and launched a series of coordinated communications designed to intimidate the plaintiff into paying. Last month, the plaintiff, his wife, and his son (currently serving in the U.S. military) allegedly received prerecorded messages claiming a “noncompliance notice” and an imminent legal filing.
- When the plaintiff called back, a representative allegedly claimed to be from a “litigation office,” recited part of the plaintiff’s Social Security number, asserted that a judgment was being pursued, and said the plaintiff could either settle for $980 or face a court balance exceeding $8,600. Threats included wage garnishment, tax refund interception, property liens, and bank levies. The caller also allegedly stated the debt was “FDIC insured” and carried a “ten-year statute of limitations,” neither of which was true, according to the complaint.
- The plaintiff authorized a $126 payment. Moments later, he received an e-signature packet titled “Payment Authorization Form” and “Validation of Debt,” which allegedly claimed a “pre-filing amount,” threatened legal action, and offered “Settlement Terms to Dismiss” even though no lawsuit had been filed.
- The defendants also allegedly obtained the plaintiff’s and his relatives’ personal information, including the son’s military contact details, through skip-tracing databases derived from nonpublic motor vehicle records.
The claims: The complaint accuses the defendants of violating Sections 1692d, 1692e, 1692f, and 1692g of the Fair Debt Collection Practices Act, as well as the Drivers Privacy Protection Act, the Michigan Regulation of Collection Practices Act, and the Michigan Occupational Code.
