Tag Archives: debt collection

Avoiding Fraudulent Debt Collectors

Debt collection generally works like this: a creditor who can’t devote the necessary time and resources needed to recover funds from old delinquent loans sells those debts to a collection agency, often for pennies on the dollar, to cut their losses a little. That agency, which now owns the debt, contacts consumers and tries to negotiate at least partial repayment.

Naturally, there are also con artists posing as debt collectors, attempting to obtain money, personal information, or both from victims. There are also collection agencies who stray from established, legal methods in order to collect legitimate debts. Here are six warning signs to watch for.

They’re trying to collect on a debt you don’t owe

Unscrupulous collectors will sometimes contact people with the same name as the actual debtor, or even settle for someone with a similar name. An outright scam artist might simply invent a debt out of thin air, or threaten random people in hopes that someone will pay out of sheer terror. In any case, never agree to pay a debt you don’t owe. Ask for a written validation notice. If they refuse, that’s a sign of trouble. Get as much information as you can about the agency, and report them to the FTC.

Important Note: collection calls for debts you didn’t incur can also be a signal that you have been a victim of identity theft. If you’ve received such a call, it may be time to check your credit report if you have not done so recently, to look for anything that shouldn’t be there.

They’re threatening you with arrest, lawsuits, or violence

For the most part, debt collectors are allowed to inform you that you owe a debt, provide proof that you owe it, state to whom the debt is owed, and present options for payment. They are not allowed to threaten you with arrest or legal action, and they’re especially not allowed to threaten physical harm to you or those around you.

They’re demanding personal information

Even if you actually owe money, there is no reason for them to ask for personal identifying information or account numbers over the phone. It’s one of the core rules of fraud and identity theft prevention: never reveal personal information to a stranger who contacted you out of the blue.

They won’t give you any information

If the caller won’t tell you the name of the agency, to whom the debt is owed, or anything else about whom he or she represents, be very suspicious. A legitimate collector will be transparent about these things, presumably because they want to actually collect on delinquent debts and stay in business, instead of being shut down by the FTC.

They’re calling in the middle of the night

This applies to a lot of other types of calls, but if they’re calling you before 8:00 a.m. or after 9:00 p.m., you have every reason to suspect either a scam or a rogue debt collector. There are rules about when they can contact you by phone. It’s kind of like putting yourself on the Do Not Call registry; if they’re already violating one rule, what else are they up to?

They keep calling after you’ve told them not to

Even if you’ve got a legitimate debt, you can still tell a collector to stop contacting you about it. Usually you will have to provide this request in writing, but once you do, they’re supposed to knock it off. Of course, if they won’t even provide an address to send said request to in the first place, you already know something is fishy.

Resources

Learn more about debt collection scams:

Report a debt collector to the FTC:

File a complaint with the Indiana Attorney General’s Office:

The IRS Is Using Private Debt Collectors Who Will Make Calls, but This Actually Changes Nothing

Sometimes fraud prevention can be boiled down to nice, simple rules that don’t leave much room for subtlety. Never wire money to a stranger. Just keeping that one rule in mind will keep you out of a lot of trouble, even if you forget the details of the scams that utilize the technique.

The IRS will never call you was another one of those hard rules, but as of 2017, it’s become a little more complicated. However, for the most part, nothing has really changed when it comes to fraud prevention.

Basically, the IRS will be contracting with four collection agencies, who will only be contacting certain taxpayers who have been delinquent for a significant period of time, whom the IRS has been unable to locate, and who meet certain other criteria. Furthermore, the collectors will not be demanding payments. Instead, they will be directing taxpayers toward electronic options for paying the IRS directly.

This means that some people will be getting calls from collection agencies on behalf of the IRS. The rest of the fraud prevention rules still apply: if they threaten you with incarceration or demand immediate payment, it’s a scam. If they’re talking about wiring money or loading up gift cards, it’s a scam.

Since con artists are nothing if not adaptable, I’ll add this point: if they do anything other than tell you about how you can pay the IRS directly on your own, it’s a scam. I’m sure someone is already gearing up to make calls claiming to be a collection agency, then telling victims they can pay over the phone with a credit card, with a wire transfer or with prepaid gift cards, or by visiting a fraudulent website. The collection agencies the IRS is using will not be asking for nor accepting payments from delinquent taxpayers. At all.

The actual website where you can pay your taxes, overdue or otherwise, is IRS.gov/Pay. And that’s pretty much the only thing the collection agencies contracted by the IRS are going to be allowed to tell you. Any mention of a different website to pay your taxes? Scam.

I recommend reading the full article below for more detailed information.