Andrew Therrien started getting threatening calls from a collection agent that went so far as to mention raping his wife if Therrien didn't pay up. The problem was that Therrien had no debts. And he was being targeted by more than one collection agency. The salesman took the harassment personally, and set out to find out who was behind it.
Therrien had been caught up in a fraud known as phantom debt, where millions of Americans are hassled to pay back money they don’t owe. The concept is centuries old: Inmates of a New York debtors’ prison joked about it as early as 1800, in a newspaper they published called Forlorn Hope. But systematic schemes to collect on fake debts started only about five years ago. It begins when someone scoops up troves of personal information that are available cheaply online—old loan applications, long-expired obligations, data from hacked accounts—and reformats it to look like a list of debts. Then they make deals with unscrupulous collectors who will demand repayment of the fictitious bills. Their targets are often poor and likely to already be getting confusing calls about other loans. The harassment usually doesn’t work, but some marks are convinced that because the collectors know so much, the debt must be real.
The problem is as simple as it is intractable. In 2012 a call center in India was busted for making 8 million calls in eight months to collect made-up bills. The Federal Trade Commission has since broken up at least 13 similar scams. In most cases, regulators weren’t able to identify the original perpetrators because the data files had been sold and repackaged so many times. Victims have essentially no recourse to do anything but take the abuse.
Therrien did not want to take the abuse and he was after more than just the agent that was calling him. He spent two years investigating the phantom debt scheme on his own until he got to the kingpin. Read about what Therrien did and what he found at Bloomberg. -via Digg
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