As we’ve discussed in previous posts, government agencies have been created and charged with overseeing and policing debt collection agencies and law firms due to illegal and unethical collection practices.
However, their responsibilities also extend to notorious debt collection scams, which have affected thousands of people and garnered millions of stolen dollars. When someone calls you imitating a collector, they may have already accessed your personal information through identity theft or by obtaining your credit report, but there will still be signs if the caller is a fraud.
Here we’ve listed a few ways to recognize a debt collection scam. Do not provide personal information if any of the following tactics are used:
- The caller uses fear or harassment to urge you to pay the debt. Licensed and trained debt collectors know that the use of abusive tactics is illegal and punishable under the Fair Debt Collection Practices Act (FDCPA). If the caller-in-question threatens you with an immediate lawsuit, a call to the police or possible arrest, they are most likely not a legitimate collector.
- The caller demands that you pay today or in the very near future, with no offer of a payment plan. Compassionate collection practices suggest that consumers be offered monthly payment plans if they are unable to pay their debt in a lump sum. A caller suggesting that you are required to pay your debt all at once is suspicious.
- The same person calls you multiple times or answers the phone every time you call. Most collections agencies have a variety of employees working on each case and a receptionist that transfers incoming calls to the appropriate extension. If you have been interacting with the same person during every phone call (both received and placed by you), ask to speak to someone else. If the caller refuses, you may be speaking with a debt collection scammer.
- They offer only one form of payment. Every collections firm and agency is interested primarily in collecting money; thus, they will typically accept a variety of payment options including personal checks, online payment with a debit or credit card, money orders or bank ACH. Scammers often encourage you to pay with a credit or debit card over the phone.
- They cannot provide an address. If you are suspicious of the caller, ask them to provide their mailing address for you to send a personal check. If they cannot provide you with basic information like an address or return phone number, hang up.
- The caller cannot answer basic questions or refers you to the original creditor with questions. Collections agencies and law firms are equipped with all of the necessary information in order to collect on your debt and are in regular contact with the original creditor. If the caller cannot provide you with basic information about the debt, such as the date of default, principle amount or interest rate or suggests you contact the original creditor with questions, he or she is likely being dishonest.
- You’ve never received written communication stating an attempt to collect on the debt. If this phone call is the first time you’ve ever been contacted about your debt, request a validation letter before speaking with the caller.
- The caller contacts you at inappropriate times or after you’ve requested collection attempts to stop. FDCPA regulations state specific times that collectors can contact you. If the calls come before 8:00 a.m., after 9:00 p.m. or while you are at work, do not answer. If you have submitted a written notice requesting no further contact about the alleged debt, communication efforts must be terminated immediately. Continued contact is considered abusive and deceptive under the FDCPA.
If you believe you are the victim of an attempted debt collection scam, contact the original creditor or report suspicious or fraudulent activity to the Federal Trade Commission.
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