Legal Question in Credit and Debt Law in California

Ask for their address and only communicate in writing.

Our firm has been a victim of this. It is very likely that this is a scam. Someone claiming to be an "investigator" with our firm was calling people and telling them that they owed money on some debt, and that if it was not paid immediately, that a lawsuit would be filed with the County Courthouse. We only got wind of it because a few of the people threatened took the time to look up our firm on the internet and called our offices to complain about the collection tactics we allegedly used. The person who made the calls had no connection to our firm, and was calling through a call center in Anaheim. We had a friend in the D.A.'s office do some checking, and the call center was just a number forwarding service for calls being placed from outside the U.S.. There was little we could do except field angry phone calls. The tactics you discuss in your post sound exactly like the ones that this scammer was attributing to our firm. If you wrote down the firm name, look them up and call their legitimate offices. My guess is that this is all a big scam. They were trying to get people's bank account information by forcing you to make a payment over the phone.

You are correct - in a civil matter (and, failing to repay a payday loan is at its worst a civil matter), you cannot be dragged into court by law enforcement. Call the firm and see if they know anything about it. If they do not, you may want to give them the details you have as you are probably not the first, and from experience I can say not the last person that will be calling them about this scam. If this is legitimate, find out who has been making the calls as they are violating the Fair Debt Collection Practices Act by calling and making these false threats. Good luck nailing these idiots!

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This is a very popular con game these days. Criminals are going around and setting up "boiler rooms" to make these calls to anyone they can get information on from anywhere on the web. Legitimate collection agencies would never say those kinds of things because they can be sued for a lot of money if they violate any of the various fair debt collection practices laws. Threatening to have you arrested by itself is enough for you to sue a legitimate creditor. Rather than worry about the debt, however, you probably should worry about identity theft. If they have enough information to pull this scam on you, they may have enough to do other things. Pull a credit report immediately and make sure neither that nor any of your bank or credit card accounts show any unusual or unauthorized activity.