The Better Business Bureau in Ohio reports that an operation calling itself National Fraud and Investigation Agency is running a phony collections scheme accusing consumers of defaulting on payday loans and threatening to arrest or sue those who don't pay immediately.

The company may have Social Security numbers, past bank account numbers or driver's license numbers, along with addresses and employer information for consumers to make the threats seem legitimate.

The BBB reports that one consumer reported National Fraud and Investigation Agency falsely accused her of receive online loans six years ago. They threatened her with felony charges if she did not pay nearly $600 within 30 minutes and another $600 within 30 days. The woman was afraid she would be thrown in jail, separated from her three small children and forced to pay a $7,000 bond.

But she asked the company where it was located. The business refused to provide her with a valid business address and she contacted the BBB.

When the BBB called the operation, it was given an address in Cincinnati that belongs to the Hamilton (Ohio) County Courthouse.

The BBB, in its release about the scheme, offered the following advice to consumers who receive suspicious telephone calls about an outstanding debt.

• Ask the debt collector to provide official documentation that substantiates the debt.

• Do not provide or confirm any bank account, credit card or other personal information over the phone until you have confirmed the legitimacy of the call.

• File a complaint with the Federal Trade Commission online if the caller is abusive, uses threats or otherwise violates federal telemarketing laws.

The BBB did not release details on how many consumers may have been contacted as a result of the scheme or whether any consumers paid the money.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry