Nightmare on Main Street

With a company name like Broadway Global Master, you might expect high kicks and jazz hands. The defendants told a dramatic story, all right — but according to the FTC, it was a harrowing tale of intimidation.

The FTC’s lawsuit alleges the defendants collected “phantom” debts that people didn’t owe them or didn’t owe at all.  Often claiming to be American law enforcement officials — like “Officer Mike Johnson" or a representative of the “Federal Crime Unit of the Department of Justice” — callers from India who worked with the defendants hounded people with a relentless barrage of dunning calls.

How many?  One consumer reported 40 back-to-back calls in one morning.  The FTC says the scheme involved more that 2.7 million calls to at least 600,000 different numbers, netting the defendants more than $4 million from struggling consumers pressured into paying down debts they thought they owed.

But it got even creepier.  One consumer told the FTC:  “The callers threatened me and claimed they would arrest me if I didn’t pay . . . .  One of the callers even contacted my neighbors and told me he was watching my house.  The callers had a lot of . . . personal information about me, including my work address.  One caller told me, ‘We just saw you walk into your office building,’ and then listed my office address.  Another caller told me there were 55 warrants out for my arrest.  Sometimes my caller ID would indicate that the call was from the FBI.  Because the callers knew so much about me, I believed they were police officers or FBI agents.”

How did callers a world away know so much about the people they were targeting?  The FTC says that information some consumers submitted in online loan applications found its way into the defendants’ hands.  Because the callers had personal info about them — for example, Social Security or bank account numbers — and because many of the victims already were in desperate financial straits, the victims believed they owed the money.  Exploiting people’s fears, the callers pressured them into paying with prepaid debt cards (like a Walmart MoneyCard) or insisted on payment via debit card, credit card, or Western Union so the cash could be deposited into one of the defendants’ merchant processing accounts.

The FTC says the harassment didn’t end there.  The complaint alleges that callers routinely used obscene language and said they’d have people arrested.  They also threatened to tell victims’ employers, relatives, and neighbors about the “debts” — and sometimes followed through on the threats.  That, says the FTC, violates Section 5 and the Fair Debt Collection Practices Act.

A federal court in California has issued an order temporarily putting a stop to the conduct the FTC has challenged as illegal and freezing the operation’s assets.  The FTC is moving forward with its lawsuit against defendants Broadway Global Master, In-Arabia Solutions, and Kirit Patel and seeks money back for consumers.

If you have an employee or friend struggling with debt, warn them about this scam by sharing a new alert from the FTC, Who's Calling?  That Debt Collector Could Be a Fake.  For legitimate debt collectors, the FTC’s court papers are an encyclopedic object lesson in what not to do.