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Reliance Communications has made full repayment of two loans amounting to $1 billion (around Rs 6,000 crore), during the quarter ended June 30.The repayments have been from the company's rupee resources.

Business News
 

Indian American charged for 'phantom' payday loan scam

Thursday - Apr 12, 2012, 12:51pm (GMT+5.5)
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Washington -  US authorities have charged an Indian American and two companies he controls for allegedly running a scheme to collect "phantom" payday loan debts that  included harassing calls from India.

At the request of the Federal Trade Commission, a US district court also halted the operation of the that scheme involved more than 2.7 million calls to at least 600,000 different phone  numbers nationwide, according to the FTC.

The targeted consumers either didn't owe money to the scheme operators or didn't owe at all.

In less than two years, the operators fraudulently collected more than $5.2 million from consumers, many of whom were strapped for cash and thought the money would be applied to loans  they owed, according to FTC documents filed with the court.

The FTC charged Tracy, California-based Kirit Patel and two companies he controls with violating the FTC Act and the Fair Debt Collection Practices Act. Patel allegedly ran the operation  from his home, although he utilised callers from India, the FTC said.

The debt collection participants typically demanded several hundred dollars. In violation of federal law, they routinely used obscene language and threatened to sue or have consumers  arrested, according to the FTC's complaint.

They also threatened to tell the victims' employers, relatives, and neighbours about the bogus debt, and sometimes followed through on these threats, the FTC alleged.

Often pretending to be American law enforcement agents such as "Officer Mike Johnson" or representatives of fake government agencies like the "Federal Crime Unit of the Department of  Justice," callers from India who were working with the defendants would harass consumers with back-to-back calls, according to the FTC.

One consumer reported that the caller threatened to have her children taken away if she did not pay, according to court documents.

By Arun Kumar




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