Debt Collector Scams

Debt collectors usually work for a collection agency and collect unpaid debt on behalf of creditors. Most debt collectors are legitimate, but there are those that don’t follow the laws and harass debtors. On the other hand, there are those who impersonate a collector and are really identity thieves.  Their purpose is to get personal information from you such as Social Security number, bank account numbers, and or credit card numbers. The debt collection industry is policed by the Fair Debt Collection Practices Act (FDCPA).

Tactics of imposters

Here are some of the tactics used by these imposters. They use threats to get you to pay the debt, such as threatening to get you arrested.  They call frequently and at any time of day or night. They may have some information on you, such as address or Social Security number.  They try to intimidate you into providing your credit card or bank account information to use as payment. They use company names that sound official.

Clues that it may be a scam

Most debt collectors are aware of the Fair Debt Collection Practices Act and don’t violate it. If the collector violates it, this may be a clue they are an imposter.  I don’t want you to think that all collectors follow the law. In 2011, there were 11,811 lawsuits that sited Fair Debt Collection Practices Act violations.

Here are some violations of the Fair Debt Collections Practices Act:

Collector threatens to arrest you; the law prohibits making idle threats.

Collector calls you during off hours (they are only allowed to call between 8 AM and 9 PM).

Collector forces you to pay; they can’t pressure you to pay debts you don’t owe.

Collector won’t respond in writing, only through email; they must send a written validation notice within five days.

Action to take when contacted

When you are contacted by any debt collector – real or fake – you should make sure the bill is yours and verify that the collector is legitimate.  Ask the collector to send you documentation in writing, by law they must provide this within five days. You have thirty days to respond after receiving the letter. Verify the collection agency by searching the internet for a website, contact the Better Business Bureau (BBB), and call the agency to verify that the collector is employed there.

If you find that the collector is an impostor, tell them to stop calling you. You should also contact the Federal Trade Commission (FTC), Better Business Bureau, and/ or State Attorney General’s Office.  Since they have some personal information on you, don’t forget to check your credit report to make sure no new accounts have been opened or there is no activity on accounts you haven’t used.

Credit Damage Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

Categorised in: Auto Loans, Bankruptcy, Civil Penalty, Debt, Money & Identity

This post was written by John Ulzheimer