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How to spot Debt Collection Scams
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How to Spot Debt Collection Scams
Know how to spot scams, safeguard your information , and inform authorities in the event that you encounter an untruthful debt collection scam.
By Sean Pyles Senior Writer | Personal finances, financial debt Sean Pyles leads podcasting at NerdWallet as the producer and host of the NerdWallet's "Smart Money" podcast. On "Smart Money" Sean talks with Nerds from NerdWallet's NerdWallet Content team to answer listeners' questions about personal finance. With a focus on thoughtful and actionable money advice, Sean provides real-world guidance that will help consumers improve their financial lives. Beyond answering listeners' money concerns on "Smart Money," Sean also interviews guests outside of NerdWallet and produces special segments on topics like the racial inequality gap as well as how to get started investing and the history for student loans.
Before Sean was the host of podcasts at NerdWallet He also covered issues that dealt with consumer debt. His writing has been featured on USA Today, The New York Times as well as other publications. When when he's not writing about personal finances, Sean can be found digging around the garden, taking runs and walking his dog for long walks. He lives within Ocean Shores, Washington.
Updated Aug 5, 2021 at 2:48 PM PDT.
Written by Kathy Hinson Lead Assigning Editor Personal finance, credit scoring, managing money and debt Kathy Hinson leads the Core Personal Finance team at NerdWallet. In the past, she worked for 18 years with The Oregonian in Portland in capacities such as chief of the copy desk and team editor and designer. Her previous experience includes writing copy as well as news editing for several Southern California newspapers, including the Los Angeles Times. She graduated with a bachelor's in mass communications and journalism from the University of Iowa.
A majority of the products we feature are from our partners who compensate us. This influences which products we feature and where and how the product appears on a page. However, this does not affect our assessments. Our opinions are entirely our own. Here's a list and .
If you're receiving threatening phone calls about the payment of a debt even if that you know about, you could be the target of a debt collection scam.
Here are some key steps to recognize and protect yourself against bogus .
The red flags for frauds in debt collection
You could be receiving an unsolicited call from a debt collector if the caller doesn't know the debt you are supposed to is due or if you hear the following:
Don't have or aren't willing to provide complete details about the debt as well as the original creditor.
They won't divulge any details about the organization the person claims to represent, including name address, phone number and address.
Uses aggressive tactics to pressure the customer into paying immediately.
Makes a request for payment by phone.
It asks for sensitive data, such as information regarding your bank account, your Social Security number or your debit or credit card number.
>> MORE:
Common scams
It's simple to spot fraud when an individual attempts to collect a debt that you don't acknowledge or even know that you don't owe. False debt collectors have a variety of methods to get your details and hope to pressure you into quick payment through a cold call.
Other scams can be more difficult to identify, for instance, an enticing scammer trying to recover a debt you due. Scammers might tap into your credit report in order to discover whom you owe money to for instance they may then make calls pretending to represent these creditors.
Threats of police action and verbal abuse are indicators of a fraudster According to the . It's not illegal to arrest someone on a debt and it's not a good idea to deceive consumers about the consequences of not paying debts. The legitimate debt collectors take their time in this area.
Another red flag is someone claiming as representing someone from the Internal Revenue Service and seeking immediate payment. The IRS, the tax collection agency of the federal government, will never demand that you make payment by phone or ask for a credit or debit card number. Both of these are indications of . However, be aware that the IRS in 2017 is a bit different.
As with any debt, ask for a validation letter -which is a document that details the details of the debt prior to taking any action.
What to do
Consider your options before you take action . However, you should take these specific steps if you believe that a caller is trying to fraud you.
Get information
Start by gathering information about the debt collector as well as the debt. Ask for a validation letter. The legitimate debt collectors must send you this information immediately without hesitation. Any hesitation might be a sign of a scammer.
Ask the caller for his name, as well as the name of his employer and phone number and street address. If the person calling you won't provide you these details, it's an indicator of trouble.
Protect your personal information
No matter how aggressively the debt collector you are considering asking for information, you should not divulge or provide information about your bank account, credit or debit card numbers, or Social Security number. Doing so could put you at risk of identity theft or let fraudsters steal money from your accounts.
Contact the original creditor
If you suspect that a fraudulent debt collector has called you to pay a debt you do owe you, inquire with the creditor who originally made the contact to confirm whether it sold the debt, as well as the contact information of the collection agency that manages it.
Ignore the calls
Refraining from receiving repeated calls is one of the best ways to get a scammer off your back. Do not hesitate to leave in the face of threats or harassment or threats, and do not answer calls. Because scammers want to make quick money off an easy subject, they're likely to keep you on their radar for long before they move away.
If you're in touch an authentic debt collector However, you'll need to make a plan to .
File a complaint
Don't be afraid to file a formal complaint with your state if a scam debt collector has called you. Find all the details you have and put the information as a formal complaint.
About the author: Sean Pyles is the executive producer and host of NerdWallet's Smart Money podcast. His work has been published on The New York Times, USA Today and elsewhere.
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