Debt Collector Scammers!

Fake Debt Collectors

Fake Debt Collectors

Unfortunately there has been an increase in the number of criminals running various scams in the United States since the global financial crisis. This is due to a number of factors but the advent of the Internet allows the scammers to obtain more data and reach more potential victims very quickly.

Some scammers are running a “phantom debt collector” scam where they impersonate debt collectors, calling people and making demands of payment. Often these scammers know a great deal about you thanks to the Internet and they often pretend to make great deals where you can save thousands of dollars if you make a payment immediately.

Someone will call and pretend to be from a bank, law firm, government agency or even the police and push for an immediate payment. Initially they might offer a great deal where you only have to pay 15% of the total amount of debt you have, but if you refuse they often become aggressive and make various threats, suggesting jail time and legal repercussions if you don’t pay.

Some of the scammers also make threats to seize your assets including your car and home, or they might make threats to forcibly garnish your wages if you don’t make an immediate lump sum payment.

One of the most common targets for these fraudulent debt collectors are people who have taken out a pay day loan. Typically pay day loan customers have a number of credit card debts which the scammers can talk about reducing for an up front payment. The scammers might have access to a lot of data including a full or partial social security number, payday loan debt totals and bank details, so they can sound very compelling and authentic when they ring up.

The FTC is taking action on companies who are trying to force people into paying these fraudulent payday loan debts and the losses involved run into the millions. However there are hundreds of small operators who fly under the radar of the FTC and operate out of small locations or are completely mobile, using modern technology to help them avoid detection.

Of course the scammers have no power to make any of those threats a reality, but unfortunately these fake threats are enough to compel some people into paying these fake debts.

Typically the phantom debt collectors will ask you to pay them immediately via a wire transfer or other instant transfer method which you can’t charge back once you realise they are scammers. Some scammers will even ask you to send cash through the mail! That is one of the red flags – if the person on the phone asks you to pay via a wire transfer or cash then it must be a scam. No legitimate debt collector would ask for money this way.

One of the new pitfalls with the Internet is that there are also dodgy sites pretending to offer payday loans. However these sites are just collecting data which they then sell to scammers who harass you at a later date.

How to avoid being scammed

You should tell the caller that you are not willing to pay anything until they have sent you a debt validation notice which confirms that the debt is in fact yours and provides all related information about the debt. Regardless of how aggressive the debt collector is, make sure you demand this validation notice.

Don’t provide any details about yourself over the phone. A scammer will try to weasel more information out of you and may try to get you to “fill in the blanks”. For example they might have a partial social security number and might try to get you to reveal the rest of it, or to reveal the rest of your bank account details.

If you don’t recognise the debt, don’t pay it! You can always talk to your original lender to confirm if they have sold your debt on to another creditor or a debt collector is chasing it up.

Be aware that you cannot be arrested for a delinquent loan. If they ever threaten you with arrest, just hang up the phone because you know they are a scammer or at best, an abusive debt collector who is behaving inappropriately.

Keep your cool and make sure you don’t foolishly rush into paying anything.

How to report the caller

Sometimes it is worthwhile asking the scammer for some of his details to pass on to the police. If they have given you wire details, a phone number or a post office box to which they want you to send money, you can report the information to the police. The federal trade commission is always looking to investigate companies that are behaving badly as well. So if it is a company harassing you, report it to the FTC as well!

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