Phantom Debt Collectors in the payday industry – Part One

The payday loan industry is beset with a new problem; as if they didn’t have enough problems already. Payday credit has taken the brunt of bad publicity for the past few years and the blame for the national debt still lies squarely on its shoulders. Payday is being made to ‘pay’ for problems that should not exist if politicians would deliver on their promises. But payday lenders have big shoulders and have carried the burden of blame for years. The latest problem, however, is once again pointing the finger at legitimate lenders as it ravages the reputation of the industry as a whole.

Payday lenders now have to contend with Payday scammers. Payday scammers are a group of crooks that ride on the backs of Payday lenders and scam clients out of the loans they seek as well as pilfering their precious cash while they are at it.

To top it off, it seems that not only the UK has suffered under these ghostly conmen. This problem has become an epidemic in the USA where phantom debt collectors even manage to get citizens to pay off ‘debts’ on payday loans that they never took out in the first place.

Meet Kevin from Cleveland. His story resembles many thousands of stories that are submitted to both the Office of Fair Trading in Britain as well as the Federal Trade Commission in America.

“I was trying to obtain a payday loan. The online lender instructed me to send them a Green Dot Money card with $195 on it for insurance to secure the loan. They would put the funds directly on the card.

I asked them why they couldn’t just deposit the loan money into my bank account, but the lending representative said it was against federal regulations. So I got the card… and read it [the number] to him over the phone. He said the funds would be available in a half-hour…

He called back and said that my social security number was “red-flagged” and the money couldn’t be sent. He said he could remove the “red flag” for $500…

At that point I said I wanted my $195 back, but then they threatened to sue me…

I realise now this was a scam, and I have closed my bank account…”

Unfortunately, Kevin’s story resembles a thousand others where payday loan scammers manage to take money off of unsuspecting victims who are having a hard time making ends meet in the first place. So beware! These phantom debt collectors can pose as lawyers, law enforcement officers, payday lenders, debt collectors and even judges. They often have most of your information that they have gleaned elsewhere and sound impressive because they know so much about you. They usually contact you telephonically, and don’t ever give you anything in writing. Your best course of action is to hang up because these fraudsters are not going to lend you anything.