Scam threatens victims with arrest © Digital Vision Ltd./SuperStock

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Scam threatens victims with arrest

Calls from a real debt collector are scary enough; these calls are from abusive thugs armed with enough personal data to make them seem legit. Don't be fooled.

By MSN Money staff and wire reports

Con artists armed with Social Security numbers, bank account information and other sensitive personal data are threatening consumers with arrest, the Better Business Bureau warns.

The callers claim to be lawyers with the "Financial Accountability Association" or the "Federal Legislation of Unsecured Loans," trying to collect on defaulted payday loans, the BBB says. The callers demand immediate payments of as much as $1,000, by wire or by credit or debit cards, to head off lawsuits before they go to court. In some cases, victims have received dozens of calls in an afternoon.

"Because the scammers have so much information about potential victims, BBB is concerned that this may be the result of a data breach," says Steve Cox, a BBB spokesman. "Thousands of people may have had their personal information compromised, and, given the scammers' tactics, it appears that those who have previously used payday loan services could be particularly at risk."

Many of the intended victims had visited online payday loan sites. The scammers often have a victim's Social Security number, old bank account numbers or driver's license numbers, as well as home addresses, employer information and even the names of friends and professional references, the BBB says.

A poster on 800notes.com describes the experience:

"Got a message on my cell phone asking to speak to my husband stating not to disregard this message and (may) God help us if he did not call back for whatever may unfold upon you. A few months back I visited a payday online site and filled it out, but decided against it because of the fees. I answer the phone the next time I see the number and tell them my husband is not home so they speak to me and tell me my husband will be charged with loan fraud, they will call his job and he will probably lose the job, etc.

"So I ask them, has a letter been sent to our address about this matter? No they say it has been e-mailed. I tell them that I will go to my bank tomorrow to research this issue and to see if any money has ever been deposited without my knowledge because I feel like this is a scam, and he tells me if you do that I will download your case right now. I said good bye. This is such a scam but what scared me is that had the last four digits of my husband's Social Security number and the name of my mother and sister-in-law due to the filling out of the application."

What to do if you're called

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The Fair Debt Collection Practices Act, among other things, prohibits collectors from making threats, harassment or misleading statements, or contacting third parties such as family members.

The BBB offers the following advice to consumers if they receive suspicious telephone calls about outstanding debts:

  • Ask debt collectors to provide documentation that substantiates the debts. Every collector must send a written validation notice within five days of contacting someone, including the name of the creditor and how to proceed.

  • Do not provide or confirm any bank account, credit card or other personal information over the phone until you have confirmed the legitimacy of the call.

According to complaints online, phone numbers that the scammers are calling from include 949-468-5107, 415-200-0274, 213-784-5745, 408-715-1614 and many others.

Updated March 9, 2010

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