Dealing with Debt Collection Scams

Dealing with Debt Collection Scams

Image by Markus Winkler from Pixabay

Have you ever received a phone call concerning a bill or debt you are unfamiliar with? Did you ever experience harassment, threat, or deception by a debt collector in the past? However, if you’re struggling with debt, you may be a target for scammers. Here’s what you need to know about debt collection scams and how to protect yourself.

Debt collection scams are on the rise. The Federal Trade Commission (FTC) reports that complaints about these scams have increased by more than 50 percent in the past two years.

What is a debt collection scam?

A debt collection scam is when someone tries to collect a debt from you that you don’t actually owe. Scammers may try to collect on fake debts, or they may try to get you to pay more than you actually owe. There is even a probability that they will threaten you with legal action if you do not pay.

What to do if a debt collector contacts you

If a debt collector contacts you, here’s what you should do:

  • Ask for written proof of the debt. This is called a “validation notice.” The notice should include the amount of the debt, the name of the creditor, and your rights under the FDCPA (Fair Debt Collection Practices Act).
  • Don’t give the debt collector your personal or financial information.
  • Tell the debt collector that you don’t owe the debt and don’t agree to pay it.
  • If the debt collector persists, ask them to stop contacting you. This can be done either via a written request or by contacting them by phone.
  •  As soon as you have done this, the company can only contact you again if they want to tell you that they will no longer be in contact with you or if they want to tell you they are taking a specific action, such as filing a lawsuit.
  • Keep a record of every discussion you have with the debt collector, including the date, time, what you discussed, and any promises you made.
  • Consider talking to an attorney. You may have legal rights under state or federal law.

If you think you’ve been the victim of a debt collection scam, you can report it to the FTC.

However, if any debt collector contacts you, you need to confirm if the debt is genuinely yours or not. 

How to determine whether or not a debt Is yours

Have you received a call from someone claiming that you have debt you do not know about?

Obtaining “validation information” is the most effective method of confirming if a debt is yours or not.

Debt collectors legally need to provide you with information as regards your debt that contains the following items:

  1. The total amount of debt owed.
  2. The name of the existing creditor, if applicable. 
  3. How to obtain the original creditor’s name

Here are some things to do if you get a phone call regarding a debt you are unaware of.

  • Make sure you know who is calling you:

You will need to know the company name and address of the collection company and the phone number so you can contact them directly.

  • Make sure you conduct your own investigation:
    • You will need to contact your original creditor to get more information.
    • Can you be held responsible for the debt?
    • What if the creditor had hired a collection agency so that the debt could be collected?
    • Does the person on the other end of the line happen to be your collector?
  • File a dispute with the creditor:

Then you can dispute the amount with the debt collector either by mail or through the internet if you feel that you do not owe any or all of the amount.

You don’t have to provide validation information if you don’t have it. 

How do I know if I’m being scammed?

There are a few things to look out for that may indicate you’re being scammed:

  • You’re contacted by someone you don’t know about a debt you don’t remember incurring
  • The caller is aggressive or threatens legal action if you don’t pay
  • You’re asked for sensitive personal information like your Social Security number or bank account number
  • You’re pressured to make a payment on the spot
  • They might keep vital information from you. 

You need to know that a debt collector must provide you with certain information, including the amount owing, in order to determine whether the debt has been paid or not. If you dispute the claim, the debt collector will be required to obtain documentation to prove the debt owed. The debt collector has to provide this information when he or she contacts you during the initial contact; otherwise, he or she must send you a written notification within five days after having that first contact.

If you’re being harassed or threatened, hang up the phone immediately. Do not give the caller any personal information. If you’re not sure whether the debt is legitimate, ask for written proof of the debt. You can also contact the original creditor to verify the debt.

What should I do if I’m being scammed?

If you think you’re being scammed, there are a few things you can do:

  • Report the scam to the FTC. You can file a complaint online or call 1-877-FTC-HELP.
  • Contact your state attorney general’s office.
  • Contact your local consumer protection agency.

If you’ve been scammed, you may also want to consider contacting your local police department.

Debt collection scams are becoming more and more common, so it’s important to be aware of the signs of a scam and what you can do to protect yourself. If you think you’re being scammed, don’t hesitate to report it and get help.

In Conclusion

When it comes to debt collections, you can easily be scammed if you are not careful. This is the main reason why you must be aware of the proper steps to take if you suspect any form of debt collection scam, as these will save you from being a victim.  

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