Feds Arrest Debt Collectors in Crackdown

Officials say the debt collectors would read from scripts to threaten people

Federal agencies teamed up on Tuesday to announce the arrest of a debt collector, accused of harassing consumers nationwide for debts they didn’t owe, and for impersonating law enforcement.

John Todd Williams and six employees are accused of running a $4.1 million debt collection practice that targeted victims in Illinois, Indiana and across the country. Under federal law debt collector s are barred from harassing consumers with repeated calls or threats.

Officials say the debt collectors would read from scripts to threaten people with lines like this:

Victim: “Ok, at this moment right now I am not working”
Debt Collector : “Well, see with that being said I would have no choice but to forward it to Los Angeles County. However Los Angeles County will issue you with a warrant for your arrest. It will be for depository check fraud as well as theft by deception.”

“Now, after years of falsely threatening arrest, these defendants are the ones who now find themselves in handcuffs, facing the loss of their own liberty,” said U.S. Attorney Preet Bharara at a news conference in New York.

The same type of alleged bullying behavior was uncovered by NBC 5 Investigates on a Chicago-area debt collector last week. So similar, Bharara included NBC 5 Investigates in his remarks.

"We also urge whistleblowers to come forward as did one by the way who went to the media last week in Chicago, apparently fed up with the way her company was collecting supposed debts as shown on NBC 5 in Chicago," Bharara said.

The arrests are the result of an investigation by the FBI, the U.S. Attorney’s Office, the Federal Trade Commission and the Consumer Financial Protection Bureau.

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