What you should do if you
are getting debt collection calls?
Call me at (254) 756-2424 if you are receiving suspicious calls.
Speak to me before calling them back if at all possible. Many things may have meaning to me that may not seem important to you.
How to deal with collection calls
How should I talk to the collector?
DO NOT threaten the collector. If you’re truly being scammed, talking about your attorney or being aggressive toward the collector could hurt my ability to get the information I need to best serve you.
What information should I retain?
Save all of your voice messages collectors leave for you!!! Save letters, texts, and anything else you receive. Keep phone numbers that appear on your caller I.D.
Some collectors call your employer, friends, family or even neighbors. Save all evidence of this, even if it’s just a number someone scribbled on a napkin.
Wrong number? If a collector is calling you about someone else’s bills, you have rights. They may be liable to you for each call they make. Call me for details.
How do I submit my case to John Fugate?
I prefer that you call me. It is more efficient, and I can quickly get information that I need to help you. If I am unavailable, I quickly return calls.
If you need to email me, please give me a brief description what happened, I will contact you if I believe I can help you and I will get more details at that time. I have received monetary settlements for over one thousand clients who experienced illegal collection tactics.
Requesting a case evaluation does not obligate you to hire John Fugate, nor does it create an attorney/client relationship. An attorney/client relationship will only exist if your case is accepted and a written agreement is executed.
Why should I contact John Fugate before paying a collector?
A segment of the debt collection industry buys and collects stolen accounts, time-barred accounts, satisfied accounts upon which nothing is owed, or fake accounts, for pennies or less on the dollars and uses fraudulent tactics to collect what otherwise are uncollectable debts. The debts are uncollectable in Court because they are either counterfeit, stolen, paid, or time barred. Great effort is taken to hide the true identity of the buyers, sellers and collectors. They often use unregistered aliases or fake names and give out addresses that are nothing more than UPS or other store private mailboxes. If they actually incorporate, they often provide false information on their corporate papers to mask the nature of their services. When they have websites, they register them through companies who are proxies to hide the owner’s and administrator’s names, and their true location.
The collectors often completely ignore debt collection laws that protect people. They frequently change their names and dispose of phone numbers in favor of newer ones not exposed on the internet as belonging to scammers. The debts are often purchased in clearly suspicious circumstances such as in a meeting in which an envelope of cash is exchanged for a thumb drive containing a thousand or “accounts”. With the accounts, the purchaser receives the victim’s social security number, date of birth, addresses, phone numbers and other private information that it is illegal to obtain under false pretense. The “debt” is often nothing more than an excuse to purchase all of your personal information.
Remember that just because you owed a debt it doesn’t mean that the current collector has the legal right to collect it nor does it mean they can lie to you or use illegal tactics.
If they do they may have to face consequences.
What if I already paid?
If you paid a scam collector or a real collector who used fraud or deception it’s not too late. I can still help. Time is of the essence.
Examples of fraudulent collection scams who have been caught
On November 4, 2015, the Federal Trade Commission and other law enforcement authorities around the country announced the first coordinated federal-state enforcement initiative targeting deceptive and abusive debt collection practices. The “Operation Collection Protection” initiative is described by the FTC as a nationwide crackdown by federal, state, and local law enforcement authorities against collectors who use illegal tactics such as harassing phone calls and false threats of litigation, arrest, and wage garnishment. The initiative targets debt collectors who attempt to collect so-called phantom debts – phony debts that consumers do not actually owe. See www.ftc.gov/news-events/press-releases/2015. For instance, a few of many people arrested or sued by the Federal Government for selling or collecting fake debts, or otherwise operating illegal collection schemes are listed:
- Scott Tucker was recently sentenced to 16 years in federal prison for a 3.5 billion dollar illegal payday loan scheme. Acting Deputy U.S. Attorney Joan Loughnane said: “For more than 15 years, Scott Tucker and Timothy Muir made billions of dollars exploiting struggling, everyday Americans through payday loans carrying interest rates as high as 1,000 percent. And to hide their criminal scheme, they tried to claim their business was owned and operated by Native American tribes. But now Tucker and Muir’s predatory business is closed and they have been sentenced to significant time in prison for their deceptive practices.”
- Scott Tucker, who was also a professional racecar driver, was ordered last year by a federal judge to pay a $1.3 billion penalty to the FTC for running an enterprise that extended illegal payday loans; Scott Tucker is appealing that fine.
- Joel Tucker, Scott Tucker’s brother, recently pled guilty to a fake payday loan scheme. See UNITED STATES DISTRICT COURT DISTRICT OF KANSAS FEDERAL TRADE COMMISSION, Plaintiff, v. JOEL JEROME TUCKER, individually and as an officer of SQ Capital, LLC, JT Holdings, Inc., and HPD LLC, SQ CAPITAL, LLC, a limited liability company, JT HOLDINGS, INC., a corporation, and HPD LLC, a limited liability company, Defendants.
- Joel Tucker was also sued by the Federal Trade Commission for fraud and was ordered to pay 4 million dollars.
- Douglas MacKinnon was charged with fraud by the Federal government on March 3, 2016. See also, Consumer Financial Protection Bureau v. Douglas MacKinnon et al., U.S. District Court, Western District of New York (Buffalo), Case No. 1:16-cv-00880FPG, filed November 2, 2016, in which the government alleges that the defendants cheated thousands of consumers out of millions of dollars by collecting and selling debts not owed or fake debts.
- Buffalo, New York debt collection scammer Travell Thomas was recently sentenced to eight years in prison and fined thirty-one million dollars for running his part in a collection scam. See United States of America v. Travell Thomas, cause number S4 1:15-cr 00667-005.
- Jay B. Ledford, an owner of debt seller DeVille Asset Management and other companies was recently sentenced to prison for 14 years for acts that the Government alleges include selling the same debts to numerous debt collectors. According to the Government he took in approximately three hundred forty-five million dollars selling fake debts and selling portfolios repeatedly. See Securities and Exchange Commission v. Kevin B. Merrill, et al., Civil Action No. 18-CV-2844-RDB (D. Md. filed Sept. 13, 2018) United States v. Kevin B. Merrill, No. 18-CR-0465-RDB (D. Md. filed Sept. 13, 2018)
- In United States of America v. Rincon Management Services, LLC, et. al., cause number EDCV11-01623 VAP (SPx), in the Federal Court for the Central District of California, numerous scammers were sued by the Federal Trade Commission and judgment was entered for in excess of twenty-three million dollars to recoup money taken by fake collectors operating in the and around Corona, California. In that case Jason Begley and Wayne Lunsford were ordered to permanently cease collection of debts.
- On July 13, 2020 the Federal Trade Commission raided and shut down and appointed a receiver over a collection scam in Charlotte, North Carolina and Fort Mill South Carolina operated by people including Jean Pierre Cellent, who also holds himself out to be an evangelist. See Federal Trade Commission v. National Landmark Logistics, LLC et.al. Cause number 0:20-cv-02592-JMC.
These are a few of a huge number of potential examples.
Common scam tactics
Debts are commonly collected by collectors using fraudulent tactics that have been standardized because the tactics work. This scheme is so successful that collectors commonly refer to the tactic as “the shake” or the Buffalo Shake where it was developed. The Shake is short for shakedown. The general mechanics of how the scheme works are that one entity acquires the account portfolio of alleged charged-off consumer credit accounts and assigns them to companies or persons who operate call centers and who make the deceptive collection calls. The assignments are often disguised as a sale but fail to meet the criteria of a sale. The seller retains a pecuniary interest in the collections and is rewarded by the illegal acts of the purported “purchaser”. In those calls, the collectors use false and deceptive scripts in which they make false claims including claiming that the caller is a process server attempting to serve lawsuit, which does not really exist. Once the victim is fraudulently scared into paying, the call is transferred to the company or employee who acts as the “payment processor”. The “payment processor” is not really a payment processor, but rather is simply the merchant who accepts payments as a proxy for the collector who cannot qualify for their own account because of various factors. One important factor is that it violates the policy of Visa and Mastercard to allow their payment platform system to be used to pay defaulted debts, so the “processor” applies with them or their agents using false information about the nature of their business, often identifying themselves to Visa as a bookkeeping, consulting, or law office, but never as a debt collector.
The payment processor falsely claims to be just a service that takes payments but actually the payment processor many times has common ownership and or control and is a part of the conspiracy and takes a large percentage of the amount collected as their fee. The payment processor is usually polite and non-threatening and sometimes records the portion of the calls wherein the victim agrees to make a payment so that it appears payment was voluntary. The payment processor often has common ownership and or management with the company that assigns the accounts for collection, or alternately has a business relationship with these entities in which they profit from the illegal acts described herein. The collector, the holder of the accounts and the merchant who receives the payment are co-conspirators who are akin to a three-legged stool which collapses in the absence of any one leg.
Even though the government has shut down numerous scammers, many of the debts they possessed are still passed around among scammers to be collected. Sometimes collectors who are new and may not know that the portfolio of debt they purchased is fraudulent attempts to collect. Using otherwise legal collection tactics does not mean the debt is owed.
Remember that just because you owed a debt doesn’t mean that the current collector has the legal right to collect it. If you are a Texas resident, I will do my best to determine whether the caller is a real collector properly licensed and bonded. You can then decide for yourself whether to pay armed with more knowledge.