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Beware Of Debt Collection Scams

Debt collection scams are on the rise. It's bad enough that consumers often have to sustain the unethical and unscrupulous practices of a debt collector trying to collect a legitimate debt, but now they must also sustain the efforts of criminals attempting to prey on them under the guise of collecting some false or nonexistent debt.

The Consumer Financial Protection Board (“CFPB”) reported the occurrence of a sharp increase in complaints about alleged phantom debt collectors in 2015. As a result, the CFPB initiated legal action against some of the entities accused of operating debt collection scams. Phantom debt collectors use false names and addresses, and, of course, do not observe the rules and guidelines of state and federal laws like the Fair Debt Collection Practices Act ("FDCPA").

Typically, these debt collectors employ various aliases and often use automated telephone calls to threaten, harass, and deceive consumers in an attempt to collect a false or entirely nonexistent debt. Potential defendants of CFPB lawsuits include not only the ringleaders of any debt collection scheme, but the telemarketing companies that make the robo calls, and the processing companies which accept payments for the alleged debts.

Consumers typically believe the debts are legitimate because phantom debt collectors verify personal information, such as birth date, social security number, and employment information. Sometimes, these debt collectors even refer to family members by name. Nowadays, such personal information is easily obtainable from debt brokers and lead generators. The online White Pages even provides the names of individuals who are related in some way to a listing. Don't let the use of such information fool you into thinking there is some connection between you and the caller.

The fake calls usually threaten that if the debt remains unpaid, the collector will contact the consumer’s employer. As a result, unsuspecting consumers provide credit or debit card payment information, or are referred to a payment processor to wire payment, and the damage is done. Often, despite signs of misconduct, payment processors will enable the phony debt collectors to access victims' bank accounts. Thus, they can't be counted on as a last line of defense.    

If you receive a call from a debt collector, you may demand a verification of the debt in writing. If a debt is disputed in writing within 30 days of the debt collector’s initial communication, the debt collector is obligated to cease collection activity until it confirms the validity of the debt. If the debt collector refuses to provide a mailing address or written verification of the debt, it is more than likely that the caller is a phantom debt collector.

At Loan Lawyers, our South Florida consumer rights and debt defense attorneys help individuals with problems related to unscrupulous debt collectors. The attorneys at Loan Lawyers can help consumers determine if their rights have been violated and whether or not a debt collector is complying with federal and state law. For a no-risk, no-cost consultation, contact one of our South Florida consumer defense attorneys today by calling (888) FIGHT-13 (344-4813).