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Bullying, lying debt collectors an epidemic
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NEW YORK (AP) — The country is facing an epidemic of unscrupulous debt collectors willing to pose as law enforcement and threaten arrest to squeeze dollars out of Americans, a top prosecutor said Tuesday as he announced the arrests of seven people who worked for an Atlanta-area company.

U.S. Attorney Preet Bharara said the abusive practices have become so widespread that even a top FBI official in New York City got a call.

"This has become something of an epidemic," Bharara told a news conference.

He described the workers at the defunct Williams, Scott & Associates LLC in Norcross, Georgia, as "ruthlessly persistent" as they badgered people in all 50 states from 2009 through April, collecting more than $4 million from over 6,000 victims.

He said the workers threatened people with imminent arrest unless they paid debts they sometimes didn't even owe.

The company was shut down after the Federal Trade Commission brought a civil action against it earlier this year.

But Richard Frankel, a top FBI official in New York, said the workers quickly opened another company under a different name and were operating at the time of their arrests.

Frankel, who recently received a call at his FBI office from an abusive debt collection agency claiming it was the "IRS," said the defendants in the scam unveiled Tuesday were "bullies with badges. The only problem was the badges were bogus."

According to a criminal complaint, the employees falsely claimed they worked for, or were in contact with, the Justice Department, the U.S. Marshals Service, the FBI and sheriffs' departments. It said victims were sometimes falsely told they would be arrested and be forced to surrender their drivers' licenses if they did not call back or pay specified amounts immediately.

Bharara said the company's employees tried to create an appearance of legitimacy by routinely using bogus legal terminology, including what he described as his personal favorite: "The statute of limitations on your civil legal rights has expired."

The employees also sent documents meant to look like they were sanctioned by the government, according to court papers.

In one instance, a victim received a document containing the seal of the U.S. Department of State with language underneath saying: "Warrant Services Association, A Division of the Federal Government Task Force," which Bharara called "a government task force that didn't actually exist."

He added: "Now, after years of threatening false arrest, these defendants are the ones who now find themselves in handcuffs, facing the loss of their own liberty. We are far from finished looking at the seedy side of debt collection. It affects too many people."