Washington : US authorities have charged an Indian American and two companies he controls for allegedly running a scheme to collect "phantom" payday loan debts that included harassing calls from India.

At the request of the Federal Trade Commission, a US district court also halted the operation of the that scheme involved more than 2.7 million calls to at least 600,000 different phone numbers nationwide, according to the FTC.

The targeted consumers either didn't owe money to the scheme operators or didn't owe at all.

In less than two years, the operators fraudulently collected more than $5.2 million from consumers, many of whom were strapped for cash and thought the money would be applied to loans they owed, according to FTC documents filed with the court.

The FTC charged Tracy, California-based Kirit Patel and two companies he controls with violating the FTC Act and the Fair Debt Collection Practices Act. Patel allegedly ran the operation from his home, although he utilised callers from India, the FTC said.

The debt collection participants typically demanded several hundred dollars. In violation of federal law, they routinely used obscene language and threatened to sue or have consumers arrested, according to the FTC's complaint.

They also threatened to tell the victims' employers, relatives, and neighbours about the bogus debt, and sometimes followed through on these threats, the FTC alleged.

Often pretending to be American law enforcement agents such as "Officer Mike Johnson" or representatives of fake government agencies like the "Federal Crime Unit of the Department of Justice," callers from India who were working with the defendants would harass consumers with back-to-back calls, according to the FTC.

One consumer reported that the caller threatened to have her children taken away if she did not pay, according to court documents.