How to spot debt collection scams
If you receive threatening phone calls about a debt, even if it’s debt you admit, you could be the target of a debt collection scam.
Here are some key ways to identify yourself and defend yourself against the illegitimate debt collectors.
Red flags of debt collection scams
You might get a call from a bogus debt collector if you don’t acknowledge the debt you’re supposed to have or if the caller:
Cannot or will not provide detailed information about the debt and the original creditor.
Will not give you information about the agency they claim to represent, including name, address and phone number.
Use aggressive tactics to get you to pay immediately.
Request for payment by phone.
Request sensitive information, such as your bank account details, social security number, or credit or debit card number.
It’s easy to spot a scam where someone is trying to collect a debt that you don’t recognize or know you don’t owe. Fake debt collectors have many ways to get your information, and they hope to get you to pay quickly through a cold call.
Others may be more difficult to spot, such as a con artist trying to collect a debt you owe. Scammers can dip into your credit report to see who you owe money to, for example, and then call claiming to represent those creditors.
Threats of police action and abusive language are telltale signs of a con artist, according to the Federal Trade Commission. You can’t be arrested for a debt, and it’s against the Fair Debt Collection Practices Act mislead consumers about the consequences of not paying a debt. Legitimate debt collectors tend to be very cautious in this area.
Another red flag: someone claiming to represent the Internal Revenue Service and requesting immediate payment. The government tax collection agency will never require you to pay immediately over the phone or ask for a credit or debit card number. Both are signs of phishing scams. Be aware, however, that the IRS will start using private debt collection companies in 2017.
As with any debt, ask for a validation letter – a document that describes the details of the debt – before you do anything.
What to do
Start by gathering information about the debt collector and the debt. Request a validation letter. Legitimate debt collectors should send you this information immediately without asking questions. Any hesitation can be a sign of a crook.
Ask the caller for their name and employer, as well as their phone number and address. If the caller does not give you this information, it is a red flag.
Protect your personal information
No matter how aggressively a potential debt collector asks, don’t disclose or confirm your bank account details, credit or debit card numbers, or Social Security number. Doing so could put you at risk for identity theft or let a scammer withdraw money from your accounts.
Contact the original creditor
If you suspect that a fraudulent debt collector has contacted you for payment of a debt you have, ask the original creditor if they sold your debt and the contact details of the collection agency that owns it. .
Ignoring repeated phone calls is one of the best ways to get rid of a scammer. Don’t hesitate to hang up in the face of harassment or threats, and don’t respond to reminders. Since scammers are looking to make a quick buck on an easy target, they probably won’t be chasing you for long before moving on.
If you are in contact with a legitimate debt collector, however, you will want to make a plan to settle the debt.