Consumers harmed by an operation that allegedly used deception and threats to collect payday loan debts that consumers did not owe will receive checks totaling $16,428 from the Federal Trade Commission.

The FTC in February 2012 charged Villa Park, Calif.-based American Credit Crunchers LLC, affiliated company Ebeeze LLC and owner Varang Thaker with victimizing consumers who had received or inquired about online payday loans. The defendants were charged with violating the FTC Act and the Fair Debt Collection Practices Act after pretending to be law enforcement officials and falsely threatening to put consumers in jail if they did not make payments.

According to the FTC’s complaint, Thaker obtained information – often including Social Security or bank account numbers – for consumers who had inquired about, applied for or obtained online payday loans. Thaker worked with telephone callers in India who called consumers using deceptive statements and threats to convince them to pay debts that were not owed or that he was not authorized to collect, the FTC alleged.

The callers often demanded more than $300, and sometimes as much as $2,000, while claiming to be law enforcement, such as a local police department, the "Federal Department of Crime and Prevention" or simply a federal investigator.

At other times, the callers said they were filing a large lawsuit against the consumer because of the delinquent payday loan or would have the consumer fired from his or her job, according to the FTC. 

But the consumers did not owe money to defendants – either the payday loan debts did not exist or the defendants had no authority to collect them because they are owed to someone else, according to the FTC.  The court order tops the illegal conduct and freezes the operation’s assets while the FTC moves forward with the case.

Consumers had received millions of collection calls from India, and starting in January 2010, the operation received more than $5 million from victims, according to the FTC.  

Consumers receiving the checks from the FTC’s refund administrator, Rust Consulting Inc., should deposit or cash them within 60 days of the mailing date. The FTC notes that it doesn’t require consumers to pay money or to provide information before refund checks can be cashed. Each consumer will receive the full amount they lost, ranging from $120 to $2,990. 


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