U.S. hits Georgia-based debt collector with fraud charges

Reuters News
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Posted: Nov 18, 2014 12:29 PM

By Emily Flitter

NEW YORK (Reuters) - Federal authorities announced fraud charges against a Georgia-based debt collection company and seven of its employees on Tuesday, saying they used threats of jail and other hardball tactics to convince more than 6,000 people to cough up money the company said they owed.

According to a criminal complaint filed by federal prosecutors in Manhattan, the company, Williams Scott & Associates, known as WSA, collected more than $4 million by claiming in phone calls to victims that it had been hired by the U.S. government to collect debts and fees for nonexistent offenses like "check fraud."

Debt collectors are frequently accused of harassing people who are behind in paying their bills. But any use of abusive, unfair, or deceptive practices is prohibited under the U.S. Fair Debt Collection Practices Act.

The Federal Trade Commission froze WSA's assets on May 27 and took it into receivership, according to federal court documents. A spokeswoman for the lawyer who represented WSA in the FTC case said he was no longer representing the company and did not know whether it had a new lawyer.

FBI agents on Tuesday arrested the seven people charged, a spokesman for the agency said.

According to the complaint, the WSA employees used aliases like "Mr. Cline" and "Investigator Ace Rogers," telling victims the "national check fraud center" had filed complaints against them and they were facing jail time. The employees read from a script containing phrases that sounded like official legal language.

"Failure to respond will lead to criminal charges being pursued," one line in the script read.

"It's a Class A felony pending against you for theft of property," another said.

The complaint said victims were told that WSA stood for "Warrant Services Association." WSA collected at least $4.1 million from victims through credit card payments between 2010 and early 2014, it said.

None of the seven people arrested could be reached for comment and it was not immediately clear whether any had lawyers.

In the complaint, an FBI agent described listening in on WSA employees' calls to victims. In one instance, a victim was told she would be charged in Los Angeles with "depository check fraud" and "theft by deception" unless she sent WSA $819.04 immediately.

The victim said she had no job and had declared bankruptcy. She asked for proof that the debt was real.

"Don't take care of it, and you'll see just how legit it is," she was told.

(Reporting By Emily Flitter; Editing by Tom Brown)