Beware of Debt Collection Scams

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paying-billsThere is a new scheme that is flourishing around the country – scammers who pose as debt collectors and collection agencies and try to get consumers to pay them. These types of scam artists often use abusive and harassing tactics in order to frighten you into providing bank and other personal information, while you falsely believe that you are paying real debts.

Many people are unable to tell the difference between a legitimate collection agency and a scammer. But there are some red flags to watch for that indicate that the collection call you receive is probably not from a legitimate collection agency. Pay attention to these if you get a call from an alleged debt collector so you can avoid becoming the next victim.

The scam is straightforward. Scammers will call consumers to collect debts, posing as real collection agencies. Often, the scammers will have already accessed your personal information through identity theft or by obtaining your credit report. By doing this, they will often appear to be “collecting” debts that you actually owe, making the scam seem very believable.

For example, the scammer may inform you that she is collecting an American Express debt. You may actually owe money to American Express, and thus may believe the caller works for American Express. The scam is that the caller actually has no relationship at all to American Express, and whatever money you fork over, isn’t going to American Express. It goes into the scammer’s pocket, as well as any other funds the scammer can access with the financial information you provide.

Here are a few warning signs that could signal a debt collection scam:

* The debt collector refuses to give you a mailing address or phone number.
* The debt collector refuses to give you information about your debt or is trying to collect a debt you do not recognize. You have certain rights to ask a debt collector to verify the debt in writing.
* The debt collector threatens you. Legitimate debt collectors probably won’t claim that they’ll have you arrested or claim that they or their employees are law enforcement officers.
* The debt collector asks you for sensitive personal financial information. You should never provide anyone with your personal financial information unless you are sure they’re legitimate.

What to do if you think you are the victim of a debt collection scam:

* Ask the caller for his or her name, company, street address, telephone number, and professional license number. Many states require debt collectors to be licensed. Check the information the caller provides you with your state officials, or the state in which the debt collector holds a license. If the caller refuses or is unable to provide you with information about his company, or if you can’t verify the information he provides, do not give money to the caller or company.
* Tell the caller that you refuse to discuss any debt until you get a written “validation notice.” This notice must include:

  • The name of the creditor you owe
  • The amount of the debt
  • A description of certain rights under the federal Fair Debt Collection Practices Act

If a caller refuses to give you all of this information, consider requesting this information in writing or seeking assistance before paying the debt to make sure the debt, and the company, are valid.

* Do not give the caller personal financial or other sensitive information. Never give out or confirm personal financial or other sensitive information like your bank account, credit card, or Social Security number unless you know the company or person you are talking with is a real debt collector. Scam artists, like fake debt collectors, can use your information to commit identity theft such as:

  • Taking out loans in your name
  • Opening new credit card or checking accounts
  • Charging your existing credit cards
  • Writing fraudulent checks

* Contact your creditor. If the debt is legitimate – but you think the collector may not be – contact your creditor about the calls. Share the information you have about the suspicious calls and find out who, if anyone, the creditor has authorized to collect the debt.
* Report the call. Submit a complaint with the Consumer Financial Protection Bureau or Wisconsin Department of Agriculture, Trade and Consumer Protection with information about suspicious callers.
* Stop speaking with the caller. If nothing else works and you believe the calls are fraudulent, hang up, and send a letter demanding that the caller stop contacting you, and keep a copy for your files.
 
 
Picture by Morgan. Creative Commons license.
 

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