Security & Fraud

FTC Returns $596K in ‘Phantom’ Payday Loan Scheme

The Federal Trade Commission said on Wednesday (April 6) that it would be mailing more than 1,700 checks — totaling more than $596,000 — to consumers who lost funds to a fraudulent debt scheme that penalized them and processed funds tied to debts that they did not owe.

The fraudulent schemes came prior to a federal court banning a number of defendants, including Kirit Patel, Broadway Global Master and In-Arabia Solutions, from the arena of debt collection.

The average checks that will go to the victims will be for slightly more than $350, and even this tally is only 63 percent of the consumers’ total funding lost. As is always noted, the FTC neither requires recipients to pay money nor provide information in the event that refunds are cashed.

In other loan activity that was found fraudulent and stopped by the FTC, the commission instigated an investigation into, and stoppage of, a Chicago area operation that used threats and coercion to collect monies that were not owed, spread across six companies and three individuals. Victims were tired of the harassment and, in several cases, elected to pay money rather than endure continued threats.

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