How to tell the difference between a legitimate debt collector and scammers
Dealing with debt collection issues can be challenging—especially when you’re not sure if the person you’re being contacted by is legitimate or trying to scam you.
When an account like a credit card, auto loan, or cell phone bill becomes past due, the original creditor may attempt to collect the amount owed. The creditor may also hire a debt collector or sell the debt to someone who may try to collect the debt. While there are many legitimate debt collectors in the financial marketplace, there are also scammers who may try to get you to pay on debts that you don’t owe or on debts that don’t even exist.
Warning signs of debt collection scams
Withholds information from you
A debt collector must tell you information such as the name of the creditor, the amount owed, and that if you dispute the debt the debt collector will have to obtain verification of the debt. If the debt collector does not provide this information during the initial contact with you, they are required to send you a written notice within five days of that initial contact.
Pressures you to pay by money transfer or prepaid card
Scammers like these payment methods because they may be untraceable, and it can be hard for you to get your money back.
Falsely threatens you with jail time or poses as a government official
But beware, if you do owe criminal fines or restitution, it is possible that failure to pay may result in your arrest.
Says they will tell your family, friends, and employer
Some scammers may try to get you to pay by threatening to reveal your debts to family, friends, coworkers, or employers. A debt collector is generally not allowed to tell other people about your debt without your permission. They can only ask others about your whereabouts to try and contact you.
You don’t recognize the debt that the person claims you owe money for
Ask questions to make sure the debt is one that you owe. Any debt collector who contacts you claiming you owe payment on a debt is required by law to tell you certain information about the debt. That information must include:
- The name of the creditor
- The amount owed
If you believe you do not owe the debt or that it's not even your debt, tell the caller that you will send a written request to the debt collector and ”dispute” the debt. You can also send a written request to the debt collector to receive more information about the debt.
Asks you for sensitive personal financial information
Such as your bank account, routing numbers, or Social Security numbers. You should never provide anyone with your personal financial information unless you are sure they’re legitimate. Scammers can use your information to commit identity theft.
Calls you at inconvenient times
Debt collectors cannot call you at an unusual time or place or at a time or place they know is inconvenient to you. You might be dealing with a scammer if you are called before 8 a.m. or after 9 p.m.
Learn how to protect yourself
Ask for a callback number
If you’re uncomfortable providing any information, you can request the caller’s name, company name, street address, and a callback number. You can use this information to verify that they are not a scammer before providing any personal information. Also, if you call back and the business doesn’t answer as the name they provided to you or it’s a nonfunctioning number, it could be a scam.
Make sure you have been given information about the debt before you pay
Make sure you have been given information or have received the written notice with information about the debt before you pay anything.
Contact your original creditor
If you suspect you are dealing with a scammer, contact the creditor the debt collector claims to be working for and find out who has been assigned to collect the debt.
Check your credit report for the account in question
You are entitled to a free credit report every 12 months from each of the three major consumer reporting companies. To get your free credit report authorized by law, go to AnnualCreditReport.com or call (877) 322-8228. Keep in mind that not all debt collectors and creditors provide information to the credit reporting companies. If the debt is not on your credit report, that does not necessarily mean the debt is not valid.
Understand your rights
The Fair Debt Collection Practices Act prohibits debt collectors from engaging in a variety of practices, such as misrepresenting the debt, falsely claiming to be a lawyer, or using obscene or profane language when trying to collect a debt.
Submit a complaint
If you have received a suspicious call or think you’ve been the victim of a debt collection scam, you can submit a complaint with the Federal Trade Commission or you can contact your state Attorney General’s office .
Editor’s note: This post was originally published on October 17, 2018.