Insider reveals inner workings of multimillion-dollar debt collection scheme

by: Jason Stoogenke Updated:

Consumers have filed formal complaints about debt collectors more than almost any other group.

Legitimate collectors can be very aggressive. 

Ones who are frauds can be even worse. They break the law, using fake names and bogus threats to get people to pay money they may not even owe.

INSIDER SPEAKS

Action 9 investigator Jason Stoogenke spoke with an insider who worked for a multimillion-dollar debt collection ring. She used the name "Michelle." 

She agreed to come forward to reveal how these schemes operate. She asked Channel 9 not to show her face, afraid of retribution.

"People we called, crying sometimes, real upset, they didn't have the money," she said. "People's feelings are involved and people lost money. And people work hard and it's just not right. Pretty much trying to push them to pay something or schedule an automatic draft to come out on a certain day. It was just not [letting] them off the phone until something was paid.”

She never faced charges. 

SCAMMERS HELPING SCAMMERS

Federal prosecutors said people behind the schemes buy lists of names, often online, and often from other scammers who keep track of people they've tricked before, people who they assume will fall victim again.

Then the schemers would call people out of the blue. 

Some of the purported debtors owe money, but some do not. It doesn't matter because either way, the debt collection rings have no business collecting the debts. They aren't legitimate debt collectors.

ALIASES AND SCRIPTS

When they call people, they use aliases -- called "shake" names -- and scripts designed to intimidate. 

Stoogenke found one in evidence in a criminal case. 

[Debt collection script that Channel 9 obtained for company that pleaded guilty]

It's complete with a "strategic pause," lies and threats, such as "We have been retained to investigate and possibly file two charges against you," and "We simply need to know if you would like to handle this matter in or out of court."


Channel 9's past coverage of debt collection schemes:


Stoogenke was told the debt collection ring who used the script even played police scanners in the background of some calls to really scare victims.

An insider -- from another debt collection ring -- emailed Stoogenke her script and it's very similar.  She would tell victims there are "pending charges against you" and threaten them with "forceful garnishment."

DEBTOR:  "THEY PUSH AND THEY PUSH AND THEY PUSH"

One of the debt collection rings called Cynthia Martin. 

"They push and they push and they push," she said.  "Real hateful. They threatened to take me to court if I didn't pay. That I could have jail time if I didn't pay."

She owed money, but not to the people calling her. But she didn't know that until she received a different phone call from another company wanting to collect on the same statement.

That company -- the real one-- didn't care she had already paid the wrong people. 

"I was livid," Martin said. 

On top of all of that, Martin was already feeling vulnerable because the father of her children had died.

U.S ATTORNEY:  "IT'S INFURIATING"

U.S. Attorney Jill Westmoreland Rose has been going after two debt collection rings in Charlotte recently.  Both cases involve thousands of victims, millions of dollars, and multiple defendants.  So far, a dozen have pleaded guilty.

"It's infuriating." Westmoreland Rose said. "You're preying on the elderly, you're preying sometimes on unsuspecting individuals, you're preying on law-abiding citizens who want to make sure their record stays clean."

ADVICE

"Michelle" said she doesn't have anything to do with fake debt collectors anymore and doesn't want other people to either. 

"If it doesn't sound right, look into it. Don't be afraid to question them as they [are] doing to you. Just, just be aware," she said.

Legally, debt collectors must identify themselves, who they work for and who they're collecting the debt for.  If anyone has any doubts, the collector has to provide documentation of the debt.

"All really good protections that consumers just aren't familiar with… if they were then there would be no debt collection scams,” Better Business Bureau President Tom Bartholomy said.

If someone calls you -- saying you owe money -- confirm two things:

  1. That you owe the money.
  2. That this caller is actually authorized to collect it.

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