Stark Law Phantom Debt Scheme Results in Checks Sent to Consumers

It took a long time but an Illinois company, Stark Law, is finally repaying consumers some money from a suit that was originally started by the State of Illinois in 2016.

In that suit, Stark Law, Stark Legal, Ashton Asset Management, CHM Capital Group, Capital Harris Miller & Associates, HKM Funding, Pacific Capital Holdings, Charles Hunter Miller & Associates, Pacific Capital, Hirsh Mohindra, Gaurav Mohindra, and Preetesh Patel were the named defendants. – Source

It was interesting to note that the operation was run out of Westmont and Chicago, Illinois, and Irvine, California.

At the time of the 2016 action, the Illinois Attorney General said, “Phantom debt collection is one of the most brazen scams today,” Illinois Attorney General Lisa Madigan said. “With the FTC, we are working to protect consumers by shutting down these scam operations.”

The FTC said, “According to the complaint, since at least 2011, the defendants used a host of business names to target consumers who obtained or applied for payday or other short-term loans, pressuring them into paying debts they either did not owe or that the defendants had no authority to collect.

The complaint charges that the defendants called consumers and demanded immediate payment for supposedly delinquent loans, often armed with consumers’ sensitive personal and financial information. Defendants also allegedly threatened consumers with lawsuits or arrest, and falsely said they would be charged with “defrauding a financial institution” and “passing a bad check” – even though failing to pay a private debt is not a crime. In addition, the complaint claims that since 2015, the defendants have held themselves out as a law firm with authority to sue and obtain substantial judgments against delinquent consumers.

The defendants also allegedly harassed consumers with improper phone calls, disclosed debts to relatives, friends and co-workers, failed to notify consumers of their right to receive verification of the purported debts, and failed to register as a debt collector in Illinois, as required by state law.

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The complaint notes that in response to the defendants’ repeated calls and alleged threats, many consumers paid the debts, even though they may not have owed them, because they believed the defendants would follow through on their threats or they simply wanted to end the harassment.” – Source

Payments Sent to Consumers

As of today, the Federal Trade Commission and the Office of the Illinois Attorney General are sending payments totaling more than $4 million to more than 10,000 consumers who lost money to the Stark Law phantom debt collection scheme.

Affected consumers are receiving full refunds, averaging $375 each. Those who receive checks should deposit or cash their checks within 90 days, as indicated on the check. The FTC never requires people to pay money or provide account information to cash a refund check

Recipients who have questions about the redress payments, or who did not receive a payment but believe they are eligible should contact the refund administrator, Epiq, at 800-858-3430. – Source

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