WASHINGTON — The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against the ringleaders of a robo-call phantom debt collection operation, their companies, and their service providers.
The CFPB said the debt collectors, using various aliases, allegedly deployed automated calls to threaten, harass, and deceive consumers in attempts to collect debt the consumers did not owe to them, and in most instances, to anyone else.
The complaint alleges that the debt collectors’ scheme depended on the participation of the telemarketing company that sent the robo-calls and payment processors that allowed the collectors to access consumers’ bank accounts.
The CFPB alleges that Marcus Brown of New York and Mohan Bagga of Georgia led a group of individuals and entities that threatened, harassed, and deceived consumers in order to collect phantom debt. Phantom debt is debt consumers do not actually owe or debt that is not payable to those attempting to collect it.
The complaint contends that Brown and Bagga did not operate alone. According to the CFPB’s complaint, Brown’s wife, Tasha Pratcher; his sister, Sarita Brown; Bagga’s ex-wife, Varinderjit Bagga; and another individual, Sumant Khan, also helped carry out the alleged scheme.
All of these individuals are named in the CFPB’s suit. Also named in the suit are debt collection companies Brown and Bagga formed to run these alleged operations: Universal Debt and Payment Solutions, LLC; Universal Debt Solutions, LLC; WNY Account Solutions, LLC; WNY Solutions Group, LLC; Check & Credit Recovery, LLC; Credit Power, LLC; and S Payment Processing & Solutions, LLC.
According to the complaint, Brown and Bagga and those working with them used many fictitious names as they threatened consumers with arrest, wage garnishment, and “financial restraining orders.” The CFPB’s claims against these defendants are based on the Consumer Financial Protection Act and the Fair Debt Collection Practices Act.
The CFPB’s complaint alleges that consumers were tricked into believing that the collectors were legitimate because the collectors verified consumers’ personal information, such as date of birth, social security number, the names of family members, and employment information. According to the complaint, Brown and Bagga purchased consumers’ personal information from debt brokers and lead generators. They then used a telemarketing firm, Global Connect, to automatically broadcast robo-calls to millions of consumers. The calls alleged that the consumer had engaged in check fraud and threatened to contact the consumer’s employer.
In response to the debt collectors’ threats and false statements, consumers provided credit or debit card payment information. The complaint alleges that once the debt collectors got consumers’ payment information, they would submit it to the payment processors, who enabled the collectors to access consumers’ bank accounts to withdraw money, despite the many indications of misconduct.