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How to Spot Debt Collection Scams
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How to spot Scams in Debt Collection
Learn to recognize scams, safeguard your information and alert authorities if you encounter frauds to collect debt.
by Sean Pyles Senior Writer | Personal finances and financial debt Sean Pyles leads podcasting at NerdWallet as the producer and host of the NerdWallet's "Smart Money" podcast. In "Smart Money," Sean talks with Nerds on NerdWallet's NerdWallet Content team to answer listeners' personal finance questions. With a focus on thoughtful and practical money tips, Sean provides real-world guidance to help people improve their financial lives. Beyond answering listeners' money questions on "Smart Money," Sean also interviews guests who are not part of NerdWallet and produces special segments that explore subjects like the racial wealth gap, how to start investing and the history of student loans.
Before Sean took over podcasting at NerdWallet, he covered topics concerning consumer debt. His writings have appeared throughout the media including USA Today, The New York Times and other publications. When when he's not writing about personal finance, Sean can be found playing in his garden, going on runs and taking his dog for long walks. Sean is located in Ocean Shores, Washington.
Last updated Aug 5, 2021 2:48PM PDT
Edited by Kathy Hinson Lead Assigning Editor Personal financial, credit scoring, managing money and debt Kathy Hinson leads the Core Personal Finance team at NerdWallet. Previously, she spent 18 years at The Oregonian in Portland in roles including copy desk chief and team editor and designer. Her previous experience includes writing copy as well as news editing at several Southern California newspapers, including the Los Angeles Times. She earned a bachelor's degree in mass communications and journalism at Iowa's University of Iowa.
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If you're getting threatening phone calls concerning the payment of a debt, even if it's one that you know about, you could be the victim of a scam to collect debts.
Here are some key steps to recognize and protect yourself from illegitimate .
The red flags for frauds in debt collection
It's possible to receive an unwanted call from a debt collector if you do not recognize the debt you supposedly have to pay or if the person calling you:
Can't or won't provide detailed information regarding the debt or the original creditor.
We won't provide you with information about the agency the person claims to represent, including the name or address as well as phone number.
Employs aggressive tactics to press you into immediate payment.
Makes a request for payment over the phone.
Requests sensitive information like the information about the details of your bank account, your Social Security number, or your credit or debit card number.
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Common scams
It's not difficult to identify fraud when an individual attempts to collect an unpaid debt you don't recognize or know you don't have. False debt collectors have a variety of methods to get your details and hope to convince you into a fast payment via a cold-call.
Some are more difficult to identify, for instance, a scammer who tries to recover a debt you due. Scammers may look into your credit report to see the people you owe money to such as, for instance, and then call pretending to represent the creditors.
Afraid of being arrested and aggressive language are indications of a fraudster In accordance with the . It's not illegal to arrest someone for a debt, and it's against the to mislead people regarding what happens if you don't pay a debt. Debt collectors who are legitimate tend to be very careful in this regard.
Another red flag is someone claiming to represent an official of the Internal Revenue Service and seeking immediate payment. The government's tax collection agency does not require you to make a payment immediately over the phone or ask for a debit or credit card number. Both are indicators of . Be aware, however, that the IRS in 2017 is a bit different.
For any credit card, request an official confirmation letter -- a document that outlines the details of the debt prior to taking any action.
What do I do?
Think before you act when . However, you should take these specific steps if you think the person calling you is trying to scam you.
Get information
Start by gathering information about the debt collector and the debt. Get a validation letter. The legitimate debt collectors must be able to provide you with this information promptly without delay. Any hesitation might be the sign of a scammer.
Ask the caller for his or her name and address, along with the name of their employer, and its phone number and street address. If the caller won't give you these details, it's an indication of a red flag.
Protect your personal information
However the debt collector you are considering asking, don't give away or verify you bank account, credit or debit card numbers, or Social Security number. Doing so could put you at risk for identity theft or let a scammer pull money from your accounts.
Contact the creditor who originally made the offer.
If you think a scam debt collector has reached you regarding payment for an outstanding debt and you believe it is a scam, contact the creditor to confirm whether it sold the debt, as well as the contact details of the collection agency that manages it.
Do not answer the phone.
Ignoring repeated phone calls is among the most effective ways to keep an unscrupulous person off your side. Do not hesitate to call back when you're faced with harassment or threats or calls, and avoid answering callbacks. Since scammers are looking to make a quick buck off an easy subject, they're likely to pursue you for many hours before moving to the next target.
If you're dealing with a legitimate debt collector You'll have to come up with a plan for .
File a complaint
Do not hesitate to file a complaint with your state if a scam debt collector has contacted you. Gather all information you can , and then include the information as a formal complaint.
The author's bio: Sean Pyles is the executive producer and host of NerdWallet's Smart Money podcast. His writing has appeared in The New York Times, USA Today and elsewhere.
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