If you’re receiving phone calls from debt collectors, you need to be sure the people you’re talking to are legit. Unfortunately, there are many debt collection scams out there and it’s easy to fall victim to these scammers if you’re not careful.
Debt collection scams usually prey on people who are in a difficult situation. The scammers know that most consumers with debt in collection are going to be nervous about the situation, and they try to use this as leverage to take advantage of people.
Some scammers use fear to get people to pay debt that they don’t owe, and others coax consumers into giving out personal information that can be used for identity theft.
Fortunately, the scammers are usually easy to identify if you know what to look for, and you can avoid becoming a victim by taking a few specific steps.
Common Debt Collector Scams
Most debt collection scams will follow the patterns of other known scams. When you’re trying to determine if a caller is a legit debt collector or a scammer, keep your eyes open for these common scams.
Asking for Sensitive Information
The debt collector should already have all of your personal information. If you’re asked to provide personal or sensitive details like your date of birth, social security number, or bank account number, it should be a warning sign that you are not speaking to a legit debt collector. The caller may ask you to provide these details to verify your identity, but be sure that you don’t give out this information.
Trying to Collect for a Debt that You Don’t Recognize
Do you recognize the debt that the caller is trying to collect? Never make payment to a collector for a debt that you don’t recognize.
There are two issues to be concerned about here. First, you want to be sure that a debt was not mistakenly assigned to you when it’s not your own debt. Second, you want to be sure that the caller is not a scammer trying to scare you into paying a debt that doesn’t exist.
Scammers know that some people will be more likely to pay when they’re pressured, even if the debt doesn’t really exist. If you don’t recognize the account that the collector is referring to, it should be a red flag.
Debt collectors are required by law to provide you with the name of the creditor and the amount owed. Legit debt collectors will be aware of the laws and they’ll be willing to provide this information to you in order to stay in compliance. However, scammers often try to withhold information to get you to pay a debt you don’t owe.
If the debt isn’t legit, they can’t provide you with real details, so they try to withhold as much information as possible.
Demanding Immediate Payment
A debt collector’s job is to get you to pay, so of course, all debt collectors will try to generate a sense of urgency so that you’ll make the payment. However, scammers will usually put excessive pressure on you to make a payment immediately.
When you get extreme or intense pressure from a debt collector to pay immediately, it’s a warning sign of a scam. Legit debt collectors will not usually threaten you with a lawsuit or some other action if you don’t make immediate payment.
Asking for Payment by Wire Transfer or Pre-Paid Card
Debt collectors should offer you multiple ways to make a payment, like paying by check or credit card. Scammers often ask for payment by wire transfer or pre-paid card because these methods of payment are harder to track, making it easier for them to get away with breaking the law. Legit debt collectors will not ask you to pay with these methods, so this is a sure sign of a scam.
Threatening to Have You Arrested
Scammers use threats as scare tactics to get people to make payments. They may threaten to have you arrested and thrown in jail. While it is possible that failure to pay your debts may eventually lead to legal issues, that would be in the hands of law enforcement officials, not a decision made by a debt collector. It’s illegal for debt collectors to threaten an action that they aren’t authorized to take.
They may also threaten to tell your friends and family or your employer if you don’t pay. Debt collectors are generally not allowed to disclose information about your debts to other people, so this is another warning sign of a scam. The scammers know that people want to avoid an embarrassing situation, so they try to take advantage of those emotions.
How to Protect Yourself
If you’ve experienced some of these common debt collector scams or you have reason to believe that a debt collection call may not be legit, there are some specific (and very effective) things that you can do to protect yourself.
Ask for the Collector’s Contact Information
Ask the caller for the name and mailing address of their company, as well as a callback number. Do a Google search to see if you can find information on the company, and be sure that you can trace the phone number to the company. Don’t deal with any debt collectors if the number provided does not match with the company records that you find.
Scammers are usually hesitant to provide full contact information. On the other hand, legit debt collectors have nothing to hide, so they won’t have any problem providing this information to you.
Contact the Original Creditor
Ask the collector for the name and contact information of the original creditor. Reach out to the creditor and ask for the name and contact information of any debt collector or collection agency that has been assigned to your debt. This will help you to know if the debt collector actually has the authority to contact you and work on a resolution for the debt.
If you’re getting calls from someone other than the collector or agency named by the creditor, don’t speak to them.
Send a Letter Asking Them to Stop Calling
By law, you have the right to instruct debt collectors to stop calling you, if you contact them in writing. Send them a letter and keep a copy for your own records. Legit debt collectors will stop calling you in order to avoid breaking the law.
Ask for Proof of the Debt
Ask the collector to provide proof of the debt so you can verify it before making any payment. A scammer won’t be able to provide proof of the debt, so this can be a very effective way to separate legit collectors from scammers.
Check Your Credit Report
You have a right to a free copy of your credit report from each of the three major credit bureaus (TransUnion, Experian, Equifax) once every twelve months. Go to AnnualCreditReport.com to get a copy of your own credit report.
Most likely, the collection account will show up on your credit report if it is legit. It’s possible that some accounts may not be reported to the credit bureau, so you can’t use this as a 100% accurate test to know if a caller is trying to scam you, but it can be helpful if used along with the other tips mentioned. Plus, it’s a good habit, in general, to periodically check your credit report for accuracy and report any errors to the credit bureaus.
It’s important to note that you can get your credit report from one, two, or all three of the bureaus at a time. If you request them one-at-a-time, you can spread them out throughout the course of the year. The majority of details will be the same on your credit report from each bureau, but some tradelines may not appear on all three, or there may be discrepancies between the bureaus related to the details.
Submit a Complaint to the FTC
If you believe that a debt collection call is a scam, file a complaint with the Federal Trade Commission (FTC). Not only can this help you to deal with your own situation, but the information you provide to the FTC can help them to identify scammers and the methods they are using, and prevent it from happening to more people. You could also report it to your state Attorney General’s office.
By being aware of the common debt collector scams and taking the right steps to protect yourself, you can easily identify most of the people who are trying to take advantage of you and prevent them from getting what they want. The most important part of protecting yourself is simply being aware and alert. If you follow the steps covered in this article, you should be able to avoid becoming a victim.