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India call centers in debt collection fraud

By , ZDNet Asia on February 23, 2012 

 

Summary

U.S. federal officials accuse Indian call centers of being involved in cheating millions of dollars out of Americans, reports say.

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A United States trade committee has accused a California-based company of siphoning off US$5 million using call centers in India, by making fake, often threatening, debt collection calls to over 10,000 customers in the U.S, reported Times of India.

According to the news daily, the Federal Trade Commission noted that the case was the first-of-its-kind in America.

BBC News reported that the callers used personal data on their victims obtained from payday loan websites--these typically offer small, short-term loans at high interest rates to borrowers.

It cited C Steven Baker, director of the Federal Trade Commission's Midwest Region, who said the collectors used aggressive and threatening language to demand payment for debts that did not exist.

In the Times of India report, the FTC said customers had received over 20 million collection calls from India.  Since January 2010, more than US$5 million was siphoned off from victims, with collectors demanding between US$300 and US$2,000 per call. It quoted David Vladeck, Director of the FTC's Bureau of Consumer Protection who said: "This is a brazen operation based on pure fraud, and the FTC is committed to shutting it down."

According to the Huffington Post, a US court has frozen the assets of California-based firms American Credit Crunchers, Ebeeze and their owner, Varang K Thaker.

They were charged with violating the FTC Act and the Fair Debt Collection Practices Act.

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