HOUSTON – They are accused of threatening people nationwide.
Victims say their phone calls threaten legal action and even an imminent arrest if they don’t pay for a debt they neither recognize or owe.
But the KHOU 11 News I-Team has found that this so-called Houston company is not only part of a new trend in scams, but may have ties to a much bigger ring of “phony debt collectors.”
They’re tough-talking and use technology and bogus addresses to become virtual ghosts.
The group is accused of haunting consumers nationwide, by tricking them into emptying their bank accounts based on slick stories and threats that are really lies.
“I think they’re flat out trying to hurt people and rip them off,” said Patrick Gaghan. He’s one of dozens of people who filed complaints against the Allied Litigation Group after receiving a call claiming he owed money for a pay day loan Gaghan said he never took out.
“He was saying we’re going to come to your office,” recalled a Ft. Bend County woman. She received a similar call threatening her if she refused to pay for what she says was a phony debt.
In recordings obtained by the I-Team, the callers identify themselves as “special investigators,” and warn consumers that they are a respondent in a court action and must appear. The caller threatens, “You or your attorney will have 24 to 48 hours to oppose this matter.”
“They’re defrauding people out of the money they need to survive,” said Gaghan.
He said the calls from Allied Litigation Group continued for months.
“They were criminal investigators, or court officers, stating they have warrants and/or court proceedings against me,” Gaghan recalled.
The 44-year-old from suburban Philadelphia said the callers warned that he would be arrested if he didn’t pay for the loan he had never heard of.
“I said, ‘Well, I need proof of this,’” said Gaghan. “They will not send me proof. They have never sent me proof. They just keep demanding money or saying they’re getting warrants for my arrest.”
Similar complaints accusing Allied Litigation Group of threatening consumers and hoping to cash-in on their fears, have been filed with attorneys general in Texas, Ohio, Florida, and with the Federal Trade Commission.
“It was just very aggressive, very threatening, very angry,” recalled the woman from Ft. Bend County.
Immediately she thought something was wrong.
“’We’re with the Litigation Group,’” she remembers being told. “And I’m thinking, ‘No, this does not sound legit at all.’”
It turns out she was right.
That’s because the Better Business Bureau has labeled Allied Litigation Group a phony debt collector.
It’s a group of bogus companies that investigators say somehow gets enough of your private information to sound believable, and then demand big bucks for something you don’t owe.
“This is a nationwide problem that we’ve seen happen across the United States,” said Monica Russo with the Houston Better Business Bureau. “Within the last few years it’s grown exponentially.”
She said there’s no sign Allied Litigation Group ever filed the necessary paperwork with the Texas Secretary of State to legally collect debts in the state.
“The truth is we really don’t know who they are,” explained Russo. “We don’t even have much contact information for this company.”
In fact, all the company would give consumers was a Houston P.O. Box.
But the I-Team learned that P.O. Box really belongs to a Houston police officer.
“I don’t know how it linked to that P.O. Box,” explained John Richardson who uses the postal address for a trucking company he runs as a side business. “I have no idea. You coming to me, that’s my knowledge of what’s going on.”
Richardson insisted he had no idea who Allied Litigation Group was or why he was getting their mail. He showed us a stack of letters from lawyers and consumer complaints.
He said months of receiving the mail did raise a red flag.
“Yes, I talked to the postal people,” said Richardson. “But like I said, it’s not concerning me. I had no idea what it was.”
So the 11 News I-Team traced Allied Litigation Group’s telephone number.
At first, the calls appeared to be coming from Ft. Bend County, but experts say, because of technology, the calls could be originating anywhere.
So we followed the trail to Pinnacle Payment Services LLC.
Consumers claim Pinnacle Payment Services processes payments for Allied Litigation Group, as well as other questioned “debt collection companies,” each with their own stack of similar consumer complaints from across the country.
Pinnacle Payment Services’ offices in Cleveland, Ohio were dark and the doors were locked.
But a few blocks away, we found Credit Source Plus LLC.
The Better Business Bureau said Pinnacle Payment Service was bought by Credit Source Plus last year.
But when the I-Team showed up at Credit Source Plus’ office, workers stood up and filed out of the office. They also wouldn’t answer questions about which company they worked for, or what they were doing.
“What’s your name?” the I-Team asked one employee.
“I don’t have a name,” she replied.
That’s when we noticed what appeared to be a phone script for workers.
It instructed workers to ask callers about their cause and affidavit number, to warn consumers about a restraining order, and promise a lawsuit.
Callers are told all of it can go away if they agree to pay a settlement.
“I don’t have a doubt there’s a connection between all of these entities,” said the BBB’s Russo.
Finally, a woman who identified herself as the manager of Credit Source Plus showed up at the Cleveland office.
“Are you guys collecting money from people for phony debts?” the I-Team asked the woman, who claimed her name was Carol Cruz.
“That’s not what I do,” she said.
“But what do you do?” the I-Team asked her as she walked away from our camera. “Why won’t you guys answer any questions?”
“Because sir, I am not in a good mood right now,” said Cruz. “Then you walk in right now asking me all these questions and stuff.”
That’s when we asked her if her company made calls or processed payments for Allied Litigation Group.
“I’m not answering any more questions,” said the manager. “I’ll give this to my attorney and he can contact you,” she said looking at a business card we gave her.
She also denied her company was linked to Pinnacle Payment Services.
But the Cleveland BBB provided the I-Team with a copy of an e-mail dated June 25, 2012. The e-mail claims to be from Credit Source Plus, LLC.
In it, the company explains to the Better Business Bureau, “We bought out Pinnacle Payment Services last year so we have inherited all of their accounts.”
We also never heard from Carol Cruz’s attorney.
If you’re contacted someone attempting to collect a debt, you have rights.
By law, collectors must verify the amount of the debt and who you owe the money to in writing.
The Federal Trade Commission also warns consumers not to give out any personal information including bank accounts or social security numbers unless you know who you’re dealing with.