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CFPB Sues Participants in Robo-Call Phantom Debt Collection Operation

Bureau Also Obtains a Temporary Restraining Order to Halt Illegal Operation and Freeze Assets of Operation’s Leaders

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) announced today that it has filed a lawsuit against the ringleaders of a robo-call phantom debt collection operation, their companies, and their service providers. The debt collectors, using various aliases, allegedly deployed automated calls to threaten, harass, and deceive consumers in attempts to collect debt the consumers did not owe to them, and in most instances, to anyone else. The complaint alleges that the debt collectors’ scheme depended on the participation of the telemarketing company that sent the robo-calls and payment processors that allowed the collectors to access consumers’ bank accounts.

“Our lawsuit asserts that consumers were harassed, threatened, and deceived as part of a reprehensible scheme to collect debt that was not even owed,” said CFPB Director Richard Cordray. “We are taking action against the many parties that allegedly contributed to this phantom debt collection operation. The ringleaders of the scheme, the telemarketing company that broadcast millions of robo-calls, and the companies that processed the payments should all be held accountable for taking advantage of vulnerable consumers.”

The CFPB alleges that Marcus Brown and Mohan Bagga led a group of individuals and entities that threatened, harassed, and deceived consumers in order to collect phantom debt. Phantom debt is debt consumers do not actually owe or debt that is not payable to those attempting to collect it. According to the complaint, Brown and Bagga and those working with them used many fictitious names as they threatened consumers with arrest, wage garnishment, and “financial restraining orders.” The CFPB’s claims against these defendants are based on the Consumer Financial Protection Act and the Fair Debt Collection Practices Act.

The CFPB’s complaint alleges that consumers were tricked into believing that the collectors were legitimate because the collectors verified consumers’ personal information, such as date of birth, social security number, the names of family members, and employment information. According to the complaint, Brown and Bagga purchased consumers’ personal information from debt brokers and lead generators. They then used a telemarketing firm, Global Connect, to automatically broadcast robo-calls to millions of consumers. The calls alleged that the consumer had engaged in check fraud and threatened to contact the consumer’s employer.

In response to the debt collectors’ threats and false statements, consumers provided credit or debit card payment information. The complaint alleges that once the debt collectors got consumers’ payment information, they would submit it to the payment processors, who enabled the collectors to access consumers’ bank accounts to withdraw money, despite the many indications of misconduct.

On March 26, 2015, the Bureau filed its complaint under seal, which has since been lifted. The Bureau obtained a temporary restraining order on that same date. After a public hearing held on April 7, 2015, a preliminary injunction was entered halting the misconduct and freezing the assets of the individual defendants and their businesses.

Brown and Bagga’s Alleged Scheme

Marcus Brown is a New York resident while Mohan Bagga resides in Georgia, and they based the operation in those two states. The complaint contends that Brown and Bagga did not operate alone. According to the CFPB’s complaint, Brown’s wife, Tasha Pratcher; his sister, Sarita Brown; Bagga’s ex-wife, Varinderjit Bagga; and another individual, Sumant Khan, also helped carry out the alleged scheme.

All of these individuals are named in the CFPB’s suit. Also named in the suit are debt collection companies Brown and Bagga formed to run these alleged operations: Universal Debt and Payment Solutions, LLC; Universal Debt Solutions, LLC; WNY Account Solutions, LLC; WNY Solutions Group, LLC; Check & Credit Recovery, LLC; Credit Power, LLC; and S Payment Processing & Solutions, LLC.

The CFPB’s lawsuit alleges that the debt collectors violated the law by attempting to collect debts that were not owed to them and by harassing and lying to consumers in that process. Federal law prohibits the use of abusive conduct or any false, deceptive, or misleading representation or means in connection with the collection of any debt. The debt collectors are alleged to have violated the law in the following ways, among others:

  • Harassed consumers with threatening robo-calls: Many consumers received multiple robo-calls about the alleged debt that they owed. The debt collectors set a call-back number in the messages that consumers received. The call-back number has been traced to Brown and Bagga. When consumers called back, they were told that they had committed crimes by failing to pay certain debts, and that if they did not agree to pay the caller, they would be served with papers or arrested for fraud.
  • Collecting or attempting to collect phantom debt: The Bureau alleges that the collectors falsely represented the status of the debt when they sought to collect debts that were not owed, or, at least, that were not owed to the debt collectors themselves.
  • Threatening legal action against consumers: The Bureau alleges that the collectors implied that if consumers did not pay the debt, they would be arrested or have their wages garnished. In reality, the Bureau alleges that the collectors had no intent to do so, nor the ability to take such action. The collectors also allegedly threatened to take action that they could not legally take or did not intend to take, when they threatened to “issue paperwork for you to appear in court.”
  • Deceiving consumers to collect debts: The Bureau alleges that the collectors accused consumers of check fraud and sought to disgrace and threaten the consumers. The collectors also used fake business names such as “LRS Litigations,” “IRS Equity,” “Worldwide Requisitions,” and “Arbitration Resolution.” Such names gave consumers the false impression that they would be subject to litigation if they did not pay the debt.

Holding Service Providers Accountable

As described in the complaint, Brown and Bagga’s debt collection scheme depended upon the participation of a telemarketing company and payment processors. The Bureau alleges that Global Connect, the telemarketing company, sent millions of automated messages to consumers as part of the scheme. Global Connect is alleged to have broadcast these messages even though the company knew they contained unlawful content.

According to the complaint, Brown and Bagga could not have run a successful operation without the assistance of the payment processors Global Payments, Pathfinder, Frontline, and Electronic Merchant Systems. Without payment processing capability, the collectors could not accept debit and credit card payments. The payment processors are alleged to have ignored numerous red flags of the debt collectors’ illegal conduct, including consumer disputes that described the scheme and communication problems with the debt collectors. The CFPB contends that by enabling the debt collectors to accept payment by credit and debit card, the payment processors helped to legitimize the collectors’ business and facilitated millions of dollars in ill-gotten profits.

The CFPB’s complaint was filed in the United States District Court for the Northern District of Georgia. The complaint is not a finding or ruling that the defendants have actually violated the law.

A copy of the complaint is available at:

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit