If you owe money on a past-due debt for credit cards, auto loans, or something else, you may be the target of debt collector scams. These scams typically include harassment and threats of all kinds. However, the supposed debt collectors balk when you try to get the information you’re entitled to by law.
If you’re not careful, collection agency scams can cost you hundreds or even thousands of dollars. Here’s how you can spot these illegal calls and what you can do to protect yourself.
How to spot debt collector scams
Just because someone contacts you about an old debt doesn’t mean they’re legitimate. It may still be a scam even if they have information on how much you owe. These scams typically use pressure and threats to scare you into paying the criminals money.
Here are red flags for detecting a scam collection call or letter:
- They withhold information: Debt collectors are legally required to validate the debt. That includes the amount owed, the creditor, and how to dispute it if it doesn’t belong to you.
- They pressure you to pay in odd ways: With a legitimate debt collector, you’ll typically pay from your bank account. But scammers often try to use other more difficult methods to track, such as money orders, gift cards, and prepaid cards. They may attempt to get you to make an immediate payment, too, and make threats if you don’t. If you pay this way, getting your money back is almost impossible.
- They threaten you with jail time: You can’t go to jail over a debt, at least not directly. If a collector poses as a government official or threatens prison time, it’s a clear sign of a debt collector scam.
- They threaten to harass others: Debt collectors are allowed to contact family members to get your contact information. But they can’t talk about any debt you owe.
- They ask you for personal information: Never provide personal or financial information, such as your social security number, to a debt collector unless you know they’re legitimate.
- They say they’re from the IRS: Whether or not you owe money to the IRS, the tax agency will never ask for payment over the phone or by text message.
In addition to phone calls, you may also get fake debt collection letters with some of the same rhetoric above. Again, legitimate collection companies can contact you via phone and mail. But they’re bound by law to work in certain ways that aren’t abusive, unfair, or threatening.
How to stop fake debt collectors from calling and protect yourself
Because these scammers don’t follow the laws that protect your rights, there’s no surefire way to stop them from calling altogether. However, you can take steps to let the criminals know that you’re onto them, which could get them to leave you alone.
Ask for a callback number
Get information from the person on the other end of the line to verify that they’re from a legitimate collection agency. For example, you can ask for the caller’s name and the company name, address, and phone number.
With this information, you can do an internet search to determine if everything matches up. You can also hang up and call the number back to see if it’s another business or a nonworking phone number.
Request written validation
Debt collectors are required to send you a validation letter within five days of their first contact with you. Ask for this information in the phone call and wait to receive it in the mail.
Remember, fake debt collection letters do happen, so do your research in the meantime to verify the debt for yourself.
Call the original lender
If the scammer is using information about a legitimate debt you owe, ask to verify the name of the original creditor — note, you can also get this information in the validation letter.
You can call the original creditor to determine whether they’ve sent the account to collections and which agency owns the debt or is trying to collect on the creditor’s behalf.
Check your credit report
Both the original creditor and the debt collection agency will report information about the debt to the three national credit bureaus. You can get a copy of your free credit report from each of the three credit reporting agencies through AnnualCreditReport.com.
Once you have the reports in hand, you can look for the debt in question. If you don’t have any past-due or collection accounts on your reports, it may be a scam or simply a collector trying to get you to pay off a debt that doesn’t belong to you.
Know your rights
Federal law, including the Fair Debt Collection Practices Act (FDCPA), offers protection against common scams and illegal tactics debt collectors may use to collect.
If you suspect you may be the victim or target of a scam, you may report the incident to the Federal Trade Commission (FTC).
Consult with an attorney
Debt collector scams can cause several problems for you, especially if the illegitimate collection agency won’t stop calling. If you’re overwhelmed, consider consulting with a debt attorney who can inform you of your rights and help you get rid of the scammers.
An experienced attorney can also help you in the case of a legitimate collection account. The Tayne Law Group, for instance, has decades of experience settling collection accounts for less than what clients owe.
The bottom line
Even the smartest among us can fall for a scam. As a result, it’s critical that you learn about debt collection scams, including how to spot and respond to them. Being confident with your responses can help you get rid of them. But if you get overwhelmed, consider getting a free consultation with a debt attorney who can help you.
