Phantom Debt Collection Scams on the Rise in Illinois

Have you been contacted by a person claiming to be a debt collector who is seeking to recover a debt you allegedly owe? If so, you are not alone. According to a recent report from CBS Chicago, such parties claiming to be debt collectors are on the rise, and they are scamming Chicago-area residents. These alleged debt collectors are part of schemes known as “phantom debt collection scams,” since they involve the attempt to collect on a debt that the consumer does not actually owe.

How can you avoid becoming a victim in a debt-collection scam? What should you do if you have been targeted by a fake debt collector?

How Do Phantom Debt Collection Scams Work?

Now, you might be thinking to yourself: I would never agree to make payment on a debt that I did not owe. But the scam is not always that simple. Parties at the center of debt-collection scams often target consumers who do actually owe debts (to someone or to some entity), and they prey on the fact that these consumers are anxious about those debts. In some cases, the scam artists are successful in getting debtors to make payments to them. In many cases, the debt-collection scammers have backgrounds in actual debt-collection services, so they are familiar with the practices and language used by real debt collection companies.

As one Illinois consumer told CBS Chicago, she never thought that she would become the target of a debt-collection scam. However, she had been married previously, and she knew that her ex-husband had incurred substantial debts. As such, when she received calls telling her that she owed a debt, she assumed it was a real debt that her ex-husband had incurred. Given that she believed the debt was real, she paid it off, only to learn later on that the payment went toward a phantom debt.

Such scams often are run by more than one scammer, and they can even ask for the same payment amount (suggesting to the Chicago consumer that the debt is indeed real). In the case mentioned above, the Illinois resident received constant calls from three allegedly different debt collection companies who were all seeking to recover on a supposed debt of between $7,000 and $9,000.

Learning More About Debt Collection Scams in Chicagoland

How are these scammers able to swindle Illinois debtors? According to the report, some of these phony debt collectors used to work in the debt collection industry. As such, they have background knowledge about debt-collection practices. For instance, one of the scammers who has targeted debtors in the Chicago area is Nelson Macwan, an individual who claims to run the debt-collection company “New Britain Financial.” As it turns out, Macwan actually used to work in debt collection, but in 2015 he “was permanently enjoined from working in debt collection in or from the state of Illinois.” That language appeared in a consent decree following a lawsuit against Macwan filed by the Illinois Attorney General for unfair debt collection practices.

Specifically, Attorney General Lisa Madigan alleged that Macwan employed “really abusive debt collection practices, trying to collect on phantom debts, calling people threatening to file lawsuits against them.” It is important for debtors in Oak Park and throughout the Chicago area to know that they have rights under the Fair Debt Collection Practices Act (FDCPA).

If you have questions about your rights, or if you have been treated unfairly by a debt collector, an Oak Park consumer protection attorney can help. You may be eligible to file a claim depending on your circumstances. Contact the Emerson Law Firm to learn more about how we can be of assistance.

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