US Faces Epidemic of Phony Debt Collectors: Prosecutor

— -- The United States is facing an epidemic of unscrupulous debt collectors who pose as law enforcement, threatening their victims with jail time unless they pay bills for things they never bought, Manhattan U.S. Attorney Preet Bharara said as he announced the arrests of seven people who worked for a Georgia-based company.

A criminal complaint was filed Tuesday against employees at Williams Scott & Associates LLC, based in Norcross, Georgia. The alleged thieves posed as debt collectors and local law enforcement, conning 6,000 people of out more than $4 million in recent years, authorities said.

Victims were tricked into believing they’d committed a crime such as fraud -- then bullied into paying up bogus debts or going to jail, authorities said. According to the criminal complaint, the employees used aliases such as “Investigator Ace Rogers.”

“I don’t care if you’re nine months pregnant, I have a job to do here,” a phony collector said on one of the calls, which was recorded.

In another recorded call, a person was threatened with legal backlash.

“I will have no choice but to forward it to Los Angeles County, However, Los Angeles County will issue you a warrant for your arrest,” a recorded caller said.

Experts warned that more fraudsters are on the loose -- and that federal authorities are cracking down.

“There are lots of companies that do this and victimized not just 6,000 people, but I think tens of thousands, if not hundreds of thousands of people all over the country,” Bharara said.

Actual debt collectors won’t aggressively harass consumers, said Christopher Koegel, the assistant director of the Division of Financial Practices for the Federal Trade Commission.

“A legitimate debt collector will not lie or deceive the consumer, try to abuse the consumer, or call at inappropriate times, or use other high-pressure tactics,” Koegel said.

The Associated Press contributed to this report.