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Justice Department Charges Georgia Debt Collector With Fraud

RENEE MONTAGNE, HOST:

Now to a story of some people who pretended to be part of law enforcement. Debt collectors allegedly said they would have people arrested if they didn't pay what they owed. They accused them of fraud. Now, seven employees of a debt collection company have found out what that experience is really like. They have been arrested and accused of fraud. NPR's Jim Zarroli reports.

JIM ZARROLI, BYLINE: The company is called Williams Scott & Associates, and it's owned by 48-year-old John Williams of Norcross, Georgia. Justice Department officials say the company had purchased about $4 million in debt from a loan company for pennies on the dollar. To collect on the debt, officials say, employees used brass-knuckle tactics that exemplified the seedy side of debt collection. The employees charged allegedly claimed to have contracts with federal agencies looking into check fraud. And they called themselves detectives and inspectors and sent letters bearing State Department seals. They also read from scripts, larded with legal-sounding language, telling debtors, there's a Class A felony pending against you for theft of property. U.S. officials released a tape of one call made by a pair of employees. The debtor begins by saying she can't pay the money she owes.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED WOMAN #1: OK, at this moment and all, I'm not working.

UNIDENTIFIED WOMAN #2: OK. Well see, with that being said, I will have no choice but to forward it to Los Angeles County; however, Los Angeles County will issue you with a warrant for your arrest. It will be for a depository check fraud as well as debt by deception.

ZARROLI: The debtor protests, how is it fraud if I simply can't pay the bill? And then she asks for more information about the collection company.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED WOMAN #1: I mean, aren't you supposed to give me some type of customer service, too, and try to talk to me?

UNIDENTIFIED WOMAN #2: Ma'am. No ma'am, you're going around getting loans not paying them back. Customer service? Ma'am, you're on the way to jail.

ZARROLI: At one point, the debtor protests that she's eight months pregnant. But she doesn't get much sympathy.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED WOMAN #2: I wouldn't care if you were nine months pregnant. I have a job to do here.

ZARROLI: One of the attorneys representing the employees declined to comment about the charges, while a second did not return a call seeking comment. None of the others could be reached yesterday. The case is an example of what U.S. Attorney Preet Bharara calls an absolute epidemic of abusive debt collection practices. And Bharara said the Justice Department would work with other federal agencies to crack down on such tactics. Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.

Jim Zarroli is an NPR correspondent based in New York. He covers economics and business news.

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