According to the Federal Trade Commission (FTC), Debt Collection related complaints have been the #2 type of complaint filed with their organization for the past 5 years, 2nd only to ID Theft. Complaints have nearly doubled between 2008 and 2012 from 105k to 200k.
Do you know how to spot a bogus debt collection call or attempt? In one type of debt collection fraud, scammers call consumers to inform them they will be arrested by local law enforcement in the immediate future if they do not immediately remit payment for a payday loan or other debt that could be from months or even years prior.
In most cases, residents have never taken out these loans, but your BBB has received reports of people paying hundreds of dollars to avoid the possibility of arrest.
These callers are also persistent and violate state and federal phone collection laws by calling at all hours of the day and night to home, cell and work numbers.
Scammers do this in order to either annoy residents at home or embarrass innocent employees at their work place in order to pressure them into paying in order to stop the harassment and threat of possible job loss.
A second, newer version of this scam involves scammers having consumers divulge personal information in order to trap them in a phishing scam.
The scammers call and/or leave a message informing the resident that they are a collection agency trying to collect a debt.
When the call is returned, they are instructed to enter a Social Security number into an automated system in order to continue the process and speak to a live representative, leaving the consumer a victim of identity theft.
After the number is entered, the scammers then try to talk the consumer into making an immediate payment using bank account or credit card information, opening up the likely possibility of immediate financial loss through theft.
Your BBB offers the following tips to avoid being taken by a debt collection scam:
- Ask the debt collector to provide official written documentation which substantiates the debt.
- Do not provide or confirm any bank account, credit card or other personal information over the phone until you have confirmed the legitimacy of the call.
- Confirm any debt a debt collector claims you owe money. Be sure there is an outstanding balance and try to pay the business you owe directly before dealing with a debt collection agency.
- File a complaint with the FTC online if the caller is abusive, uses threats or otherwise violates federal telemarketing laws.
- Start With Trust. Check out businesses in the U.S. and Canada at bbb.org