Owing money can be a nerve-racking experience — even more so when people approach you about the debt. You’re already feeling bad about it and now comes someone asking what you’re going to do to resolve the debt.
This emotional stress can make you easy prey for scam artists. Some people gain access to credit reports and contact people about their outstanding debts. Purporting to represent the owed entity, they harvest as much cash as possible before moving on to their next victim.
These debt collector scam red flags will help you spot those criminals.
Violations of the Fair Debt Collections Practices Act (FDCPA)
Enforced by the Federal Trade Commission, the FDCPA governs the behaviors within which debt collectors are allowed to engage as they attempt to exact payment from a consumer. Chief among its tenets is the fact that debt collectors cannot legally engage in abusive, unfair, or deceptive practices when they work to collect debts. Thus, if you find yourself on the phone with someone behaving inappropriately, the odds are good they’re running a scam.
Claims of Representing Governmental Agencies
Most people have an aversion to dealing with the Internal Revenue Service — even when they’re pretty sure they’ve done nothing wrong. Knowing this, scammers will often claim to be from the IRS or some other governmental agency seeking immediate payment in full. No government agency will ever contact you demanding immediate payment — under any circumstances whatsoever. Nor will one ask you for a debit or credit card number. Now, with that said, yes, the IRS does use private collections services, but these companies operate solidly within the guidelines of the FDCPA.
Asks for Personally Identifiable Information
Hopefully by now you know better than to give anyone your Social Security number or your banking details. Honest people are aware of the dangers of this, which is why they never ask for them. Therefore, anyone who does should be viewed with suspicion.
Presses for Immediate Payment Over the Phone
Yes, legit debt collectors will accept payment over the phone, although every expert on how to get out of debt advises against doing it this way. After all, when you provide credit card or bank account information to someone you don’t know, you’re placing your financial future in the hands of a stranger. Simply put, this is a bad idea. You’re likely to wake up the next morning to find the linked account has been raided mercilessly.
Inability to Provide Background Information About the Debt
Any legitimate collector will be able to tell you when the debt originated, the original amount and with whom the debt was incurred. They’ll also be able to tell you the exact amount currently owed, when the last payment was made, and how much of the existing balance is fees, penalties and accrued interest. In legitimate cases, you’ll be asked to request this information in writing to get what is known as a Debt Validation Letter. However, most scammers will move on to lower hanging fruit when pressed to provide this information, because they don’t have it.
How to Handle a Call
Debt collector scam red flags are easy to spot — when you know what you’re looking for. However, even if you don’t, the best move is always to deny any recollection of a debt when contacted about one. Tell the caller they’ve reached you at a bad time and ask them to call you back at a moment of your choosing.
Download an app that will let your phone record calls in the interim.
When they call back, tell them you’re recording and ask for the background information about the debt listed above. One more thing: Never take responsibility for a debt in any way whatsoever until it is proven you owe it — in writing — and the statute of limitations on collecting it has yet to kick in.
