Fake Debt Collectors Terrify Consumers

Aug. 21, 2008 — -- Scammers masquerading as debt collectors and law enforcement officials have terrified consumers with threatening phone calls and bilked them out of thousands of dollars, officials with the West Virginia Attorney General's Office say.

Prosecutors said that the scammers, who speak with heavy foreign accents, are known for repeatedly calling people at home and at work and threatening them with arrest if they don't repay supposed debts -- debts that, according to West Virginia officials, don't actually exist.

Sign Up for Our RSS Feed and Get the Latest Business Headlines From ABC News

The scammers operate under names such as U.S. National Bank, Federal Investigation Bureau and United Legal Processing, said West Virginia Assistant Attorney General Norman Googel.

The callers also have invoked the names of actors Denzel Washington and Steve Martin, people who've received calls tell ABCNews.com.

Googel said that the scammers have been impossible to track down, but ABCNews.com spoke to one man who claimed to be associated with U.S. National Bank. The man said he works for Financial Crime Division, a company he said provides services for USNB.

The man refused to give his name and gave little information about his company.

"It's not necessary that each and everyone knows about Financial Crime Division, and probably one of them is you," he said. (To hear an excerpt of this interview, click here. Links to more interview excerpts are included on the second and third pages of this story.)

The man also denied that consumers had been threatened with arrests.

But Mark Feury, a 35-year-old assistant manager at a hotel cafe, said it was the threat of an arrest that drove him to wire nearly $800 to U.S. National Bank in January. The Lewisberg, W.Va., resident said that he took out several payday loans -- short-term loans -- in 2005 to help pay for Christmas presents and medical treatments for his son, who suffers from autism.

Feury said he paid his loans back in 2007, but the scammers' phone calls -- at least 35 in all, he said -- and their threats made him doubt himself.

"I was scared to death," he said. "Everything they said literally just stressed me out to the max."

The group has targeted consumers who took out payday loans through Web sites years ago, Googel said.

The group has secured consumers' Social Security numbers and other personal information, which may have been stolen from Internet payday lending sites, Googel said.

What has made the group especially intimidating, Googel said, is its use of phrases that sound like legal terms -- such as "downloading affidavits" -- but, in reality, are meaningless.

The alleged scammers have also invoked God, Googel said, telling victims that "only God can help you now."

Some of the scammers' tactics are downright puzzling.

One West Virginia woman, who asked that her name not be revealed, told ABCNews.com that a scammer once called her and identified himself as "Denzel Washington."

Feury said that one of the scammers who called him said he was calling from "Steve Martin's office."