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Prosecutor: US faces debt collection scam epidemic

Federal Trade Commission  FTCLARRY NEUMEISTER, Associated Press

NEW YORK (AP) — A New York prosecutor says the nation is facing an “absolute epidemic of debt collection abuse practices” so widespread that even one of the FBI’s top officials got a call.

Prosecutor Preet Bharara made the comment as he announced the arrest Tuesday of seven members of a Norcross, Georgia, debt collection agency.

He said the defendants were “ruthlessly persistent” as they threatened people with imminent arrest unless they paid debts they sometimes didn’t even owe.

He said the firm bullied people in all 50 states from 2009 through April, collecting more than $4 million from over 6,000 victims.

The company was shut down after the Federal Trade Commission brought a civil action against it. But FBI official Richard Frankel said the workers just opened another company under a different name.

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