How To Spot Debt Collection Scams - What You Need to Know
Dealing with debt collection can be intimidating - especially if you are unable to spot the difference between legitimate collection agencies and scams. Here, we will discuss how to identify and avoid these fraudulent attempts at separating you from your hard-earned money:
Warning Signs of Debt Collection Scams
- If you receive a communication from a collection agency that does not list the name of the collection agency or collector, it is a scam. - If you receive a communication from a collection agency that claims you can make a payment by gift card, wire transfer, prepaid debit card, cryptocurrencies (like bitcoin), or other non-standard payment methods, it is a scam. - If the collection agency claims you will go to jail, be deported, or see your credit ruined unless you pay immediately, it is a scam. - If you receive a communication from a collection agency that uses abusive language, threats, or intimidation, it is a scam.
Avoiding Debt Collection Scams
- If you receive a communication from a collection agency, check the name and address on the envelope and in the communication; if either doesn’t match the information on your credit report, it is a scam. - If you are unsure whether a communication is legitimate, contact your creditor; if the debt collector is listed on your credit report, it is a scam. - If you have already paid off the debt and the collection agency is trying to get you to pay again, it is a scam. - If you have paid off the debt, but the collection agency keeps demanding payment; it is a scam. - If you have a dispute with the amount owed, but the collection agency is demanding payment in full; it is a scam. - If your debt is beyond the statute of limitations for collecting, but the collection agency is demanding payment; it is a scam.
What To Do If You Have Been Targeted By a Scam
- Report it to the FTC, your state attorney general, or the Federal Trade Commission. - Report it to the creditor's collection agency or the creditor directly. - Document everything related to the communication. - Save all communication from the scammer. - Be careful about falling for a scam once; scammers are often very persistent, and it’s easy to fall for a scam more than once.
How to Verify a Legitimate Debt Collector
- Call the number listed on your credit report for the debt collector; if the number listed on your credit report is different from the phone number on the communication, it is a scam. - Call the name and address listed on your credit report for the debt collector; if neither matches the communication, it is a scam. - Look up the debt on your credit report; if the amount is incorrect or the debt is not listed at all, it is a scam. - Ask the debt collector to confirm the amount you owe; if the debt collector is legitimate, they will confirm the amount and tell you the name of the creditor you owe. - Tell the debt collector that you will dispute the amount owed; if the debt collector is legitimate, they will tell you that you have 30 days to dispute the debt and will not try to collect until you have done so.
Contacting Legitimate Debt Collectors
- Once you have verified that the debt is legitimate and you have proof that you owe the money, you should attempt to negotiate a lower payment. - Once you have verified that the debt is legitimate, try to provide as much information to the debt collector as possible. - Once you have verified that the debt is legitimate, you should provide proof of your income to the debt collector. - Once you have verified that the debt is legitimate, you should look into income-based repayment or debt-relief options.
Tips for Dealing with Debt Collectors
- Never ignore a debt collection; responding to the collector will prevent the debt from going to collections and will make it easier to pay off. - Repay the debt as quickly as possible; paying off the debt will reduce the amount of damage it does to your credit score. - Pay as much as you can; even a small payment will make a large impact on your credit. - Use the extra money you would have spent to pay off your credit card debt; doing so will make a much larger impact on your credit score.
Conclusion
A debt collector is a company that buys your unpaid debts from the creditor and attempts to collect the debt from you. If you ignore a debt collection notice, the debt collector will likely take further action, such as threatening to sue you or garnish your wages. If you have already paid off a debt and have been contacted about the debt again, or if you have a debt that will go past the statute of limitations (SOL), you should contact the collection agency to discuss the situation. If you are dealing with a legitimate debt collector and you are able to provide documentation and information showing that you do not owe the debt, they will stop contacting you.
