Scam targets payday loan borrowers

The Connecticut Department of Banking is warning debtors to be aware of a new scam in which people posing as debt collectors threaten arrest unless payday loans are repaid. "This is kind of a new low," Banking Commissioner Howard Pitkin said. The scammers, who appear to be located offshore, gain information on people who apply for payday loans online. They then call the debtor and harass them at work, at home and sometimes contact neighbors. They even say they are going to send federal agents to the person's home or office to arrest them for fraud.