A "malicious loan"?! How does that work? I borrow money simply to flash in front of my friends and hurl insults at them about how broke they are?

Never let bullies on the phone confuse extortion with debt collection. Honest debt collectors cannot whistle up police to act as their agents, they do not typically send their claims straight to a judge, and they don't take your ransom money to broker quick deals with so-called "process servers". There are no secretive "arbitrators", "assessment specialists", "detectives", "investigators", "mediators", "mitigators", or "prelitigation specialists". Those who tell you such lies are sweaty double-talking criminals with a script full of coercive remarks. The agents' horrid threats are empty and their conduct is illegal.

Lawful debt collection in America is a process, not an ambush. Early in that process you must be given a specific notice about your alleged debt and how to dispute it. From there, you have a right to obtain proof of claim *on paper*. You have a right to control when, where, and how debt collectors contact you. Federal law does not expect you to take only the word of strangers on the phone that bad things are about to happen. Do not reward lawbreakers with your money. Challenge them always, sue them if you can.

FTC and CFPB material on US federal collection law:
http://www.ftc.gov/os/statutes/fdcpajump.shtm
http://www.consumerfinance.gov/askcfpb/search ... debt-collection

FTC alert: "Fake Debt Collectors"
http://www.consumer.ftc.gov/articles/0258-fake-debt-collectors

FTC blog: "Don’t recognize that debt? Here’s what to do."
http://www.consumer.ftc.gov/blog/dont-recognize-debt-heres-what-do