Beware of Debt Collection Scams
With the pandemic still wreaking havoc on the economy, many people struggle to pay their monthly bills and meet their debt payments. Unfortunately, scammers exploit the financial downturn by tricking unsuspecting people into paying for debts that don’t exist or using abusive tactics to collect legitimate debts. Don’t be the next target of a debt collection scam! Here’s all you need to know how to beware of debt collection scams:
How the scams play out
A caller claiming to represent a debt-collection agency demands immediate payment for an alleged outstanding debt in a debt-collection scam. The caller insists on a specific payment type and may threaten to tell the victim’s friends about the unpaid debt. This alleged debt is fake, or the scammer has hacked the target’s accounts to learn of its existence. In either scenario, the caller does not represent the creditor and will pocket any “collected” money.
These scams can also take the form of abusive debt collection, in which a caller collects money for a legitimate debt but does so using abusive and illegal practices.
How to spot a debt-collection scam
You might be looking at a scam if an alleged debt collector does any of the following:
- Withholds information about the debt and the creditor
- Threatens the debtor with jail time
- Insists on specific means of payment
- Asks to be provided with personal financial information
Know your rights
A lender can legally sell the debt to a collection agency when outstanding debts go unpaid. The agency can then attempt to collect the debt through letters and phone calls.
According to the Fair Debt Collection Practices Act (FDCPA), debt collectors cannot:
- Contact borrowers at unreasonable hours.
- Call borrowers at their workplace if the borrower says they cannot accept phone calls at work.
- Harass borrowers about debt, including using threats of violence and calling the debtor multiple times daily.
- Engage in unfair collection practices.
- Lie about the money owed.
- Falsely represent themselves.
- Threaten the debtor with jail time.
- Falsify the name of the agency they represent.
Protect yourself
If you’re unsure whether a debt collection scam targets you, ask the caller for a callback number and confirm information about the debt. The collector should know the amount owed and tell you the name of the company behind the debt. This is one more way to beware of debt collection scams and keep cool.
And if you still believe you are being scammed, contact the creditor and ask if the debt collection was outsourced to another company.
If you are a target
If an illegitimate debt collector has targeted you, report the scam at ftc.gov/complaint. You must dispute the charge if a falsified debt appears on your credit report. If a collection agency is employing abusive tactics, or if you’d like them to stop calling you, it’s best to send them a letter asking them to cease all contact. Once the agency has received the message, they can only reach out to you to confirm there will be no further contact or inform you of a specific action.
That was hard and fast, but this information is vital! Now you know how to beware of debt collection scams. Make sure to share this so your friends and family do not get caught in these scams. Getting behind on your bills is stressful enough, but to have fake debt collectors calling is just too much. Elevate understands that times are challenging, and we have many options to help you. Find out more today at Elevatecu.com.
