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3 Strategies for Dealing with Debt Collection Scammers

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If you’ve received a call from a debt collection agency telling you that you’ll be arrested, served with a lawsuit or subject to criminal charges if you don’t pay them right away, there’s a good chance it’s a debt collection scam.

As a general rule, anytime a debt collector calls you out of the blue, proceed with caution. That’s especially true if:

  • The collector is threatening you with dire consequences if you don’t pay immediately, or
  • You owe or applied for a payday loan – especially an online payday loan.

Both of these scenarios are associated with scammers who are often (though not always) based overseas.

To protect yourself against debt collection scammers, there are three steps you should take:

1. Verify the Debt is Legitimate

It is very risky to pay a debt collection agency the first time it contacts you by phone. If it turns out to be a scam, your money will be gone with no hope of getting it back. So take time to investigate and you could save yourself some serious money.

The fact that the debt collector has your personal information, such as your Social Security number, employment information, or names and telephone numbers of friends or relatives does not mean the debt is legitimate. Fraudsters can easily buy information about people who have defaulted on debts or who applied for loans online through sketchy websites. Anything you’ve put in a credit application could wind up in the hands of these crooks.

Under a federal law, the Fair Debt Collection Practices Act, a debt collector must provide you with a written “validation notice” within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, how much you owe, and how to dispute the debt if you don’t believe it is correct. Insist this notice be mailed – not emailed – to you.

Another tip: Get your  free annual credit report from all three credit bureaus to see if the collection account is listed on your credit reports. If it is, and the information is not accurate, you can dispute it. Conversely, if it is not on your reports, it could be a further indication that you are not dealing with a legitimate collection agency, as the scammers can’t and won’t report to credit bureaus. (While you’re at it,  monitor your credit scores for free. A sudden drop in your scores could indicate a collection account has been added.)

2. Verify the Collector is Legitimate

“Spoofing” technology makes it easy for a collector to pretend they are calling you from a phone number that is not theirs. Scammers have impersonated law firms and even law enforcement agencies in an effort to get you to pick up the phone and make a payment.

Ask the caller for the name and address of the collection agency they work for. Again, you are entitled to this information. Then go online to see what you can find out. Does this firm exist? Are they listed with the Better Business Bureau? If so, are there complaints about them? You can also try searching for the phone number listed on your caller ID, but please remember these numbers can be faked. So don’t rely on that information alone.

If the name of the collection agency or law firm is legitimate, it does not hurt to call them directly if the call you received seemed suspicious. If the agency is legitimate they will have no problem confirming your debt. But if it turns out someone else is using their name to try to rip people off, they will want to know about that as well. Same thing goes with callers who claim to represent the FBI, sheriff’s department, courts or other government agencies. These agencies will be able to confirm you are talking with scammers. (Courts don’t call consumers to collect debts, by the way, and neither does the FBI!)

3. Fight Back

Any of the following are red flags when a debt collector calls you demanding payment:

  • Discussing your debt with relatives, coworkers or friends (that’s illegal);
  • Threatening to “serve you” with a lawsuit if you don’t pay first (process servers who deliver these notices rarely, if ever, call consumers first, and they don’t try to collect payment);
  • Warning you that criminal charges will be filed, including “theft by deception.” It’s not a crime to be unable to pay your bills, and consumer debts are typically civil matters, not criminal.
  • Insisting you send them a prepaid card or wire payment. These funds are untraceable, which is why crooks like them.

You can tell a collector who is crossing the line that you are going to report them to law enforcement. You can also file a complaint with Fraud.org or the Consumer Financial Protection Bureau to file a complaint.

If they continue to call, you may need to screen your calls with a service like NoMoRobo.com, Google voice, or with an answering machine. Eventually they will (hopefully) stop calling.

This article has been updated. It was originally published Feb. 3, 2015.


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  • george

    I have not had more than a very, very few collection companies call and they were from a supposed debt several years old.. On those few which I feel are legitimate such as overlooked medical lab fees or fuel companies, I immediately offer pennys on the dollar, paid today, safely, with a money order, which has never failed. They are paid by commission and would rather get several low ball deals than let the next boiler room tech get any of it. They could care less how much you owe the original creditor.
    On those which I believe (Know) are scams I will “send for me”, get on the phone, act drunk and mumble on and on and on, wasting their time while I meander off, go to the restroom for several minutes and do everything I can think of to waste the scammer’s time. Time is money to the scammer. Just when I feel the scammer is ready to hang up I suddenly start to “sober up” and keep him or her on the phone for a few more minutes only to start muddling off into the drunken fog again. It actually becomes fun.

  • donovan

    I used to get calls from “collection agencies” about two or three times a year. I finally got sick of it because I owed nothing and contacted the Attorney General. Surprise,surprise, the calls stopped!

  • Fed-up with BoA fraud in TX

    I had an issue about fraud and collection from Bank of America and it had been dragging on for over nine months. I mistakingly send BoA two payments for one bill (I owned B0A $207.4, the other $270.44 mistake) after I dispute for the mistake payment and ask for refund, they refund the payment (mistake) in billing statement but then turn around add the same amount to debt purchased so they could keep the extra $270.44.
    For exampt: If a business overcharge you $200 you paid and if they refund the same amount to you it should be cancel out but BoA belief that they should increase your bill $200 more.
    This is how their accounting work and because I continue to disputing the wrong accounting money that they want to keep, they send my name for collection then report to the three credits bureau for late and non-payment eventhough I had never late payment with them. I do not pay minimum balance each cycle I pay full balance when I receive the bill and had not have any late payment for many years. Who, where, and how can I seek help beside AG and Consumer Finance Protection Bureau or will I have to ask for help from an attorney?
    Lang, tiring of BoA fraud in TX

    • http://www.Credit.com/ Gerri Detweiler

      You are in Texas so you can try the
      Texas Consumer Complaint Center. If they can’t help you I would suggest you contact a consumer law attorney.

  • Brenda

    I received several calls from three different numbers stating I had two judgments against my SS# and that I needed to call the # given and speak to legal….I called asked for the last four of my SS# before they would tell me the name of company…. Said I wasn’t going to pay gave them my address and said I’ll wait to be served….this has been going on for over a month…

  • Lucy Farrah DeMonique

    Like, never deal with any collection agent via phone or email. Make them use US Postal.

  • Dervrak

    My home state of West Virgina passed a law a year or two back requiring all debt collectors who are trying to collect on debts outside the statute of limitations (so called junk debts) to state in bold print on all correspondence and also over the phone, THIS DEBT IS OUTSIDE THE STATUTE OF LIMITATIONS. WE CAN NOT SUE YOU OR RECORD THIS DEBT ON YOUR CREDIT REPORTS. So if you get one of these letters or calls with this statement on it, you know you can just laugh and ignore it because it is essentially nothing more than a request for a voluntary donation to the collection company.

  • http://darylbowling.com Daryl

    BofA is very bad, had a car loan from then at one time, paid early every month and was two payments ahead or more, went and had a takk wit hte manager she would not give and inch and she knew she was wrong, anyway shortly afterwords my wife at the time died, i had life insurance on her for the car note, sent the paper work off and they sent me nte title plus 2k more or less some from the insurance an some from B of A who was not happy, i thought it was great, got my money back and got to give them hell too and went to the bank and made them cash their check ust to be mean….

  • http://darylbowling.com Daryl

    as for medical they used to call me and tell me i was not sending them enough, so i would tell them you were getting 25 now its 20 say another word and it goes down to 15 and if you tray again it goes to 1 dollar……somehow 35 was more then enough in a hurry like ten seconds


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