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HindustanTimes Sat,19 Apr 2014

US busts another scam by India-based call centres

HT Correspondent, Hindustan Times  Washington, April 11, 2012
First Published: 22:15 IST(11/4/2012) | Last Updated: 02:40 IST(12/4/2012)

US authorities announced, on Wenesday, that they have busted another payday scam, worth several million dollars, conducted on US citizens from callers in India.

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A US court halted this operation following charges filed by the Federal Trade Commission. It was run by two California-based companies owned by Indian-origin businessman, Kirit Patel.

More than 2.7 million calls were made to at least 600,000 phone numbers in the US, said the FTC. Patel's business allegedly collected $5.2 million from consumers in less than two years.

The commission had stopped a similar operation run by an Indian businessman also out of California in February. The calls were traced to a call center in Hyderabad.

Hindustan Times had then reported that US authorities were looking at many more such scams being run from call centers in India. The latest is one among those that were investigated then.

How the scam works
Callers target US citizens who have either taken payday loans (to be returned by net payday) or have considered it by visiting websites offering such loans.

They receive repeated calls from people pretending to be US law enforcement officers -- such as Officer Mike Johnson -- threatening to take action if the owed sum was not returned.

This is also being called Phantom Debt scam also because callers are known to have targeted people who had no outstanding debts and forced them to pay by threatening them with arrest.

The Federal Trade Commission said that in one instance callers told a victim they would take away the person's children if the sum was not returned immediately.

Another consumer told the FTC, "The callers threatened me and claimed they would arrest me if I didn't pay them the alleged debt. 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."

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