The Federal Trade Commission has reached a settlement with Kirit Patel and his company, Broadway Global Master Inc., who the FTC alleged operated a fraudulent debt collection scheme in which they illegally processed more than $5.2 million in payments from consumers for payday loan debts they did not owe. According to the agency’s release, the settlement resolves a complaint the FTC filed in 2012 alleging that callers working with the debt collectors harassed consumers into paying on bogus debts, often pretending to be agents of law enforcement or fake government agencies such as the “Federal Crime Unit of the Department of Justice.” The court subsequently halted the operation and froze the parties’ assets pending litigation.
Settlement. According to the terms of the settlement, Patel and his company will be banned from the debt collection business, among other conditions, and assessed a judgment of more than $4.3 million, although due to their inability to pay, the amount will be suspended upon payment of $608,500, which will be used for consumer redress.
The release noted that Patel pleaded guilty to mail and wire fraud charges brought by the Justice Department in a separate criminal proceeding.
Fake debt collectors. The FTC also published a blog post by Amy Hebert, Consumer Education Specialist, helping consumers identify fake debt collectors. Hebert said a caller may be a fake debt collector if:
- you don’t recognize the debt;
- you can’t get a mailing address or phone number for the collector; or
- you’re threatened with arrest or told you’ll be reported to a law enforcement
- agency.
