Payday Loan Collection Scam Warning

By: From The Illinois Attorney General's Office
By: From The Illinois Attorney General's Office

Chicago (WIFR) -- Attorney General Lisa Madigan today warned Illinois residents to be on the alert for scam artists posing as collectors of payday loan debt. The scammers call consumers and threaten them with legal action unless the victims authorize payments from their bank accounts.

In recent weeks, Madigan's office has seen a rise in consumer complaints about the bogus collection calls. Most of the consumers report they have taken out payday loans in the past, usually from an online lender, but paid off the loans long ago. In at least one instance, the consumer reportedly filled out an online payday loan application but never completed the process.

Madigan stressed that these complaints involve outright con artists, not innocent mistakes by legitimate debt collectors. Victims who have contacted Madigan's office report that the phone calls seem to originate from outside the United States. Often, the fake collector already knows personal information about the consumer, such as their name, Social Security Number, and place of employment, which can lead the consumer to believe they are dealing with a legitimate collector. Also, the scammers usually have the consumer's bank account information on file and ask the consumer to confirm the accuracy of the information.

Many times, the con artist will claim to be affiliated with a law enforcement agency. In almost every case, the bogus collector threatens the victim with legal action, including a lawsuit or arrest, if they don't make a payment right away. The scammers attempt to force victims into an immediate payment and ask them to authorize a direct withdrawal from their checking account. In some cases, they ask their victims to sign a promissory note and submit it to the bogus collector by fax. Some victims reported to the Attorney General's office that they have paid hundreds of dollars before realizing they have been scammed.

The bogus debt collectors use a variety of names, including: Morgan & Associates, Federal Bureau of Investigators, DNR Recovery, DNI Recovery, Legal Accounts Association, Department of Law and Enforcement, CashNet USA, America Legal Services, Quick Cash, and ACS.

Although many of these names are fake, some are names of legitimate businesses that the purported debt collectors may be using without permission.

The Attorney General urged those who receive a suspicious debt collection call to remember the following advice:

  • You cannot go to jail for failing to pay a debt;

  • If you are threatened in any way by the debt collector, hang
    up and file a complaint with the Attorney General's office;

  • Do not give out any personal information over the telephone,
    including bank account numbers or credit card numbers;

  • When in doubt, ask the debt collector to provide you with
    documentation that substantiates the debt they are trying to collect;

  • Contact the original creditor and ask whether the debt has
    been paid. If it has not, confirm that the debt was sold to a third party collector before making a payment.

Consumers can contact the Illinois Attorney General's office at or by calling the Attorney General's Consumer Fraud Hotline at the following numbers:

Chicago 1-800-386-5438
Springfield 1-800-243-0618
Carbondale 1-800-243-0607

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Comments are posted from viewers like you and do not always reflect the views of this station.
  • by Bryant Salazar Location: Dallas texas on Nov 21, 2011 at 03:33 PM
    Providence legal department out of fairfax Va ?
  • by Denise Location: NH on Jul 7, 2011 at 11:24 AM
    I just called and told them I turned their number over to the Attorney General, and they started yelling at me that I would going to jail, and they don't care who I called, they're not afraid of any Attorney and they would be calling the police and my supervisor at work, and I would be arrested soon.
  • by CarsonD Location: NY on Jun 27, 2011 at 03:09 AM
    Though any form of credit, from home loans to payday loans, bears some risks and responsibilities, those risks don't include dealing with illegal action. Things like deceptive payday cash advance collection frauds should be watched for. Payday loans are private transaction for consumers who desire discretion during their emergency cash situations. For those on a very tight budget,some may resort to applying for pay day loans because it is easy and and you can have the money you needeed in just short period of time. Applying for this kind of transaction needs careful selection of company or agent. Especially nowadays that pay day loan scam are also on the rise. I found this here: Consumers should watch for payday loan collection scams,
  • by star Location: oklahoma on Jun 10, 2011 at 10:18 AM
    I made a quick payday loan online and paid it back on time and about a month later rec'd a call stating they are lawyers of america and are collecting on a defaulted payday loan. He did not speak english very well and threatened that if I did not pay $690 by 5:00 that they were going to file a suit that week and that I would be arrested at work. They could not give me the dollar amount of the loan or the company I had used. Unfortunately for me I panicked and paid them but got suspicious when I kept getting the same call over and over. I learned the hard way. I know how to handle them now. Tell them I have there number and am turning them into the state attorney general office and hang up.
  • by lanae Location: washington on May 19, 2011 at 07:53 PM
    I just got a call today from a company claiming I am going to be turned over for civil for fraud and malicious activity. When I questioned the woman about the information she hung up on me so I called back and she yelled i don't care and hung up again. I called back of course and talked to someone who claimed to be the manager saying they need my credit card or debit information to process the payment as a bond. Huh? Why? I work collections and this is not proper procedure. I said i need something in writing first, claims too late to email? What 5:30! I told them I need it to be mailed not email, he said that they would provide it but I don't think so. They don't really have anything and all their information is old.
  • by Andrea Location: Colorado on Jan 26, 2011 at 01:06 AM
    They are hitting up Colorado now! I got a call Monday, very shady, obviously fake. The voicemail they left first claimed they were "DNI" recovery, I called the number back , their very obviously NOT professional voicemail my call went to said either "United" or "Union" recovery (United Recovery is a legitimate agency btw, I called them to make sure I wasn't in colletions with them, I was not) then when I called again, the lady who answered said "DNR" recovery. I asked, "What is this company?" and she said, "What is your name ma'am so I can assit you?" totally avoiding my question. The call when on to her saying I defaulted on a $3300 payday loan and if I didn't pay at least $960 that day,they had a wage garnishment order on me , affect immeditaly. Well, when I got to work that day, my employer had no such paperwork or order. I called the lady back and she said "regardless of what you think you know" if I didn't pay, I was going to be sued. Than she hung up on me.
  • by Jules Location: California on Dec 12, 2010 at 04:03 PM
    They're hitting up California now. One of them threatened to track me down and "hurt" me when I told her she's going to prison for fraud.
  • by Lora Location: Missouri on Nov 4, 2010 at 02:17 PM
    This is happening in Missouri also. I have been caught up in this scam. I started an loan application and decided not to finish the application. And the hell started, and all of the people I tried speak with at the business are foreign and very hard to understand. Please people be very careful. I have learned a hard lesson.
  • by teal Location: new york on Aug 31, 2010 at 02:57 AM
    payday loan is really fast loans .You can take it online.
  • by Demensi on Aug 30, 2010 at 04:04 PM
    For immediate real time information about advisories such as these or emergencies in your area there is a new, FREE, location-based service that specializes in emergency notifications called Nixle (
    • reply
      by Sidney on Mar 17, 2011 at 02:37 PM in reply to Demensi
      be very careful they are calling me and tring to get money out of me when i asked to provide me with a contract they say i have to pay for it and thats the same payday company that said i made a loan with them i get phone calls saying they are taking me to court they call me dirt names
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