April 10--An Aurora company was shut down this week for running an illegitimate debt collection operation that allegedly bilked consumers of at least $3.4 million, the Federal Trade Commission said Friday.
The FTC and the Illinois attorney general's office jointly brought a lawsuit against KIP, owner Charles Dickey and manager Chantelle Dickey, alleging that the company scared and tricked people into paying debts they didn't owe. Some of the victims had taken out short-term loans from payday lenders but the loans were not delinquent, nor did KIP have the right to collect on the loans, the complaint said.
The number of consumers allegedly bullied into paying the company may be in the thousands, but the FTC could not be more specific.
Efforts to reach the defendants were unsuccessful.
The agencies obtained a court order Tuesday to temporarily close the business and freeze its assets while they move forward with the case. The court also appointed a receiver to oversee the business.
The FTC said the case is part of broader crackdown on phantom-debt collectors. The complaint against KIP is the seventh suit the agency has brought since 2012.
The scam operators often pretend to be law enforcement officers or government authorities and threaten to arrest and jail consumers if they refuse to make a payment on a delinquent payday loan. They also threaten to file lawsuits and to call the consumer's employer to get them fired. Scammers, officials said, usually demanded payments of about $500, but as high as $2,000.
The debt collectors obtained personal information for thousands of consumers who applied for short-term loans through payday lenders.
The FTC and the Illinois attorney general's office said they have received hundreds of complaints against KIP. The complaint alleges that the defendants have been operating in the western suburbs for several years, and during this time have changed their business name at least nine times.
asachdev@tribpub.com
