On May 19, Ohio Attorney General Mike DeWine announced the filing of a lawsuit against the alleged operators of a fictitious debt collection enterprise that threatened and harassed consumers, many of whom were not actual debtors.

The Attorney General’s lawsuit, filed in Cuyahoga Common Pleas Court, names Mohan Bagga of Duluth, Georgia; Marcus Brown of Buffalo, New York; and Universal Debt & Payment Solutions LLC as defendants.  The lawsuit alleges the operation violated Ohio’s Consumer Sales Practices Act and the federal Fair Debt Collection Practices Act.  Among the allegations, the defendants are accused of operating sham debt collection businesses under the names “LRS Litigations,” “IRS Equity,” and “Worldwide Requisitions.”  The illegitimate businesses allegedly harassed consumers by placing multiple phone calls in a short period of time, using obscene language, and failing to disclose the caller’s identity or provide written notice to the consumer regarding the supposed debts.  As part of the scam, the alleged operation also threatened consumers with arrest, legal action, or imprisonment and threatened collection of property and wages upon failure to pay.

DeWine stated, “Our investigation determined that this operation routinely lied to, threatened, and harassed consumers to try to trick them into paying debts they did not owe.  The people behind this scheme need to be held accountable, and consumers need to know that they don’t have to take this kind of abuse.”

Ohio state law and the federal FDCPA establish legal protection from abusive debt collection practices.  Under the FDCPA, third-party collectors cannot use profane language, cause a telephone to ring repeatedly or continuously, or threaten arrest or legal action against debtors.  Additionally, third-party collectors may not misrepresent the debt or use deception to collect the debt.  They must identify themselves to the consumer in every communication and send the consumer a letter within five days of a phone communication, explaining the amount of the debt and information related to disputing the debt.  Finally, third-party collectors must verify the debt upon request by the consumer.

The Ohio Attorney General’s office has received upwards of 130 complaints regarding the operation’s harassing practices.  DeWine is seeking restitution for consumers who turned over payments to the fictitious companies, including imposition of civil penalties and ending any unfair or deceptive practices committed by the defendants.