Debt Collection Fraud: What Do You Need to Know?

If you received a phone call or letter in the mail telling you that you owe an outstanding debt, you may hurry to resolve it so that this so-called debt does not ruin your credit. Do not be too hasty.

Debt collection fraud is increasingly common. According to Investopedia,¬†debt collection fraud¬†entails scammers, who pose as agents of debt collection companies, calling consumers demanding the repayment of bogus obligations. Unfortunately, the people who typically fall for these scams are individuals with actual outstanding debt, and who are eager to “settle” for the oftentimes small amounts scammers quote. If you receive any type of communication claiming you owe money, look for the signs of debt collection fraud before you mail a payment or give up your banking information.

Signs of debt collection fraud

If you owe money to one or more companies, it may be difficult to discern between real debt collection notices and fraudulent ones. To help you, Investopedia provides six tell-tale signs of fraud to look for:

  • The caller pressures you to pay immediately via money transfer, debit or cash.
  • The caller withholds information regarding the exact amount you owe, the name of the debt collection agency or creditor, or any other details that may help you determine the legitimacy of the debt.
  • The caller makes threats, such as threatening you with jail time or that he or she will contact your employer.
  • The call comes late at night or in the early hours of the morning.
  • The caller or notices attempt to get personal information out of you, such as your Social Security number or bank account information.

If any of these signs are present, or even if you question the legitimacy of the call, do not attempt to repay the obligation until after you do your due diligence.

Avoid falling victim to scammers

If you suspect you are the target of a debt collection scheme, there are certain actions Investopedia suggests you take. For starters, try to get as much information from the caller as possible. Ask for the agent’s name, the company’s name, and its contact information (including address). Request details regarding the debt in question, including the name of the original lender and the amount you owe. Finally, file a complaint with the state Attorney General’s Office as well as the Federal Trade Commission, both of which will look into the scam further.

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