Debt Collection Scams Exposed: How to Outsmart the Crooks
If you’re struggling with outstanding debt, you might feel overwhelmed. Unfortunately, scammers are preying on people in this situation, posing as debt collectors to bully and intimidate you into paying debts you may not even owe. Don’t fall victim to their aggressive tactics and threats.
What Is the Debt Collection Scam?
In this scam, fraudsters pose as debt collectors to intimidate and deceive victims into paying money they may not actually owe. Scammers often use aggressive tactics, such as threatening lawsuits, wage garnishment, or arrest, to pressure victims into paying quickly. These crooks work hard to be as accurate as possible about the debt to be more convincing. As with other scams, fraudsters typically demand payment through unconventional methods like wire transfers, prepaid debit cards, or gift cards, which make it difficult to trace the money.
Example of the Scam
Frieda receives a letter from a collection agency demanding payment for a medical bill she paid months ago. The letter threatens to report her to credit bureaus and damage her credit score if she doesn’t pay immediately. Frieda calls the number on the letter and is told to pay with a prepaid debit card. She becomes suspicious and contacts her healthcare provider, who confirms that the bill was paid in full.
Tips for Protecting Yourself
- Question aggressive tactics. Be wary of debt collectors who use aggressive or threatening language. Legitimate debt collectors must adhere to the Fair Debt Collection Practices Act (FDCPA), which prohibits abusive, unfair, or deceptive practices.
- Request written verification. Always request written verification of the debt, including the original creditor’s name, amount owed, and date of the debt. Don’t provide any personal or financial information over the phone until you have received verification in writing.
- Verify the caller’s identity. If you receive a call from a debt collector, ask for their name, company name, address, and phone number. Verify this information by contacting the original creditor.
- Dispute unrecognized debts. If you don’t recognize the debt, dispute it in writing with the collection agency within 30 days of receiving the first notice. This will put the burden of proof on the collector to provide evidence of the debt.
- Know your rights. Familiarize yourself with your rights under the FDCPA. This law protects you from harassment, false statements, and unfair collection practices.
If You’ve Been Scammed
- Contact us. If your account information has been compromised or if you believe you’ve mistakenly paid a scammer, let us know.
- Contact the CFPB. You can file a complaint with the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov, which oversees debt collection practices.
- Report the scam to the FTC. File a report with the Federal Trade Commission at ReportFraudFTC.gov and your local law enforcement agency.
- Report the scam to your state attorney general. You can find their contact information at naag.org.
- Consider a fraud alert or credit freeze. Placing a fraud alert or credit freeze on your credit report can help protect your identity and prevent scammers from opening new accounts in your name.
Contact us to learn more about safeguarding your financial information and securing your accounts. Our experts are here to help.
