A phony debt collection scam in Colorado has state regulators warning residents to be aware of callers pretending to be law enforcement or government agency officials.
The fake names being used by the scammers, who are referring to themselves as payday lenders, include: ACS Inc., ACS Legal Group, Ace Cash Services, Ace Cash Advance, Advance Cash Service and American Cash Advance.
"By using personally identifiable information, including Social Security numbers, the caller attempts to collect on alleged payday loan debt. Complaints about this scam have increased by 1350% between 2013 and 2014," said Colorado Attorney General John Suthers. "The familiarity of these names, along with strong-arm language like, 'You are in violation of federal banking regulations,' and use of official sounding agencies such as 'United States of attorney' and state investigation department,' are the most common elements found in the complaints."
The scammers typically threaten consumers with reporting them to the Federal Bureau of Investigation, Federal Trade Commission and even to their employers if payment is not immediately received.
Suthers' office earlier this week reported that more than 165,000 state residents owed $56 million to payday lenders at the end of 2013 and the number of people taking out such loans is rising. The increasing numbers of legitimate payday lenders are believed to inadvertently aid potential scammers as more consumers are possibly confused about whether they do or do not have an outstanding payday loan account.
Colorado residents who took out payday loans grew by more than 9% in 2013 compared with 2012, said Julie Meade, head of the attorney general's Consumer Credit Unit. A total of 481,000 Coloradans borrowed $189 million in 2013.
Suthers' office urges people receiving calls from collectors to verify that the firm is licensed to collect in Colorado by searching the Licensed Collection Agencies List.