Educating yourself about debt collection scams is one of the best ways to avoid them. And if fake debt collectors come calling or you suspect you’ve fallen victim to such scams, there are things you can do to protect yourself.
9 Tips for Preventing Debt Collection Scams
- Verify the Debt Is Legitimate
- Verify the Agency Is Legitimate
- Check Your Credit Reports
- Protect Your Information
- Contact the Original Creditor
- Understand Your Rights
- File a Complaint
- Contact the Credit Reporting Agencies
- Remember Some Debt Is Legitimate
About Debt Collection Scams
The Federal Trade Commission reported that scam and fraud reports were up an unfortunate 70% from 2020 to 2021, and imposter scams were the main culprit. They accounted for $2.3 billion in losses in 2021.
Imposter scams include any scam that involves a person or entity pretending to be someone else. That includes debt collection scams where someone pretends to be a legitimate company collecting debt from you. Here are a few things you should know about debt collector scams:
- They can happen to anyone, and some scammers are quite sophisticated. That means it can be possible for anyone to get tricked into giving these people money.
- You have a right to verify debts before you agree to talk about payments.
- Doing a bit of homework and following paperwork trails can help you avoid debt collection scams.
Keep reading to discover the steps you should take when you’re contacted by a debt collector or think you might be the target of a collection agency scam.
Verify the Debt Is Legitimate
You have the right to ask for verification of a debt when you’re contacted by a debt collector. Do this by disputing the debt in writing and asking the collection agency to send a validation letter, including the name and address of the original creditor for the debt.
A legitimate creditor will provide you with information that includes:
- The amount you owe
- The name of the original creditor
- A notice of your rights, including your right to dispute the debt
If the agency is unable or unwilling to provide this information, they are either violating your rights as a consumer or may be attempting to scam you.
Verify the Agency Is Legitimate
Avoid cash-and-go scams and other issues by verifying that the collection agency contacting you is legitimate. Here are some steps you can take to do so:
- Ask for everything in writing. Never negotiate or make payment based solely on a phone call.
- Research the collection agency online. Look for a legitimate website or information on sites like the Better Business Bureau to find out if the business is real.
- Call your state attorney general’s office to find out if there are any complaints about the agency and if it can legally operate in your state.
Check Your Credit Reports
Checking your credit reports or your free credit report card helps you understand whether you might owe a debt you didn’t know about. It also lets you see if someone has reported inaccurate information about a debt you don’t owe. When you know what’s on your credit reports and whether or not it’s accurate, fake debt collection calls can’t use that information to threaten you.
Protect Your Information
Sometimes fake debt collection callers want more than your money. They may also try to trick you into giving them enough personal information that they can steal your identity or sell the information to people who would. Protect your information by being careful what you say to these callers. Never answer questions like “Can you confirm your full name or your Social Security number” if someone calls you about a debt. If they called you, they should have the information they need to collect the debt and shouldn’t ask you to provide it.
Contact the Original Creditor
Contact the original creditor to find out more about the debt, whether you think you owe it or not. If you do owe the debt, you may be able to negotiate a payment with the original creditor that’s less than you’d pay a debt collection agency.
Understand Your Rights
There are rules for sending someone to collections that businesses must follow, and there are also rules that govern how debt collectors pursue debts. For example, no collector can harass you, and if you’re being harassed, it could be a sign that the agency isn’t legitimate. If you’re on the phone with a debt collector threatening to serve papers, your best defense is knowing what laws are on your side.
File a Complaint
You can submit a complaint with the Consumer Financial Protection Bureau if you believe a debt collector is violating your rights or you’ve been targeted by a debt collection scam. You can also file a complaint with your state’s attorney general’s office.
Contact the Credit Reporting Agencies
Debt collection scams can be a sign that your information is at risk. To run one of these scams, someone has to have enough information to come up with a plausible-sounding debt in your name and contact you. It may be a good idea to freeze your credit report with the credit bureaus. That means no one can pull your credit report for the purpose of evaluating you for a loan or other debt unless you unfreeze your report—and no one impersonating you can cause that to happen, either.
Remember Some Debt Is Legitimate
Finally, remember that some debt is, unfortunately, legitimate. It may be shocking to hear from a collection agency about an old debt, but that doesn’t mean you don’t owe it. While you can ask that the debt collection agency stop contacting you, if the debt is real, you still owe it. Failing to pay it could result in a lawsuit or further action to collect from you.
Getting Back on Track After a Debt Collection Scam
If you think you’ve been the target of any type of financial scam, including a debt collector scam, it’s important to work to get your credit information and other accounts in order as soon as possible. Working with a credit repair organization can help you attend to those details while continuing to live your life.
This article has been updated. It was originally published Feb. 3, 2015.
