How to Recognize and Avoid Debt Collection Scams

debt collection scam

The Federal Trade Commission (FTC) recently released a report showing that Florida still sees the most scams of all states. Unlike in the past though, these scams are largely targeting millennials, not the seniors who have been in scammer’s sights over recent years. Throughout the country, the most popular scams involve imposter scams, catalog sales, and telephone and mobile services. In Florida, though, the most common schemes include debt collection scams.

Debt collection scams involve one or more people impersonating a debt collection company in order to get money from people unlawfully. Detecting these scams is often difficult for consumers. After all, creditors often hire a debt collection company to recover debts on their behalf. So, how do consumers know when they are dealing with an honest debt collection company, and not a scammer pretending to be one?

The Debt Collector Applies Immense Pressure to Recover the Debt

Even debt collectors working for legitimate companies are often very aggressive in their tactics. Most of the time, they don’t get paid unless they recover the debt. However, they are also typically willing to work with debtors in the form of preparing payment arrangements and providing the debtor with many options. When a debt collector uses immense pressure or threatens a lawsuit if the entire debt isn’t paid right away, they are likely a scammer.

The Debt Collector Uses Odd Repayment Methods

Honest debt collection companies will offer a number of payment methods. The more they offer, the easier it is for consumers to pay off their debt. However, these payment methods are fairly standard. They typically include check, debit or credit card, and making payments online. When a debt collector asks for other forms of payment, such as iTunes cards or an untraceable wire transfer, they are likely part of a scam.

The Debt Collector Uses Threatening Language

Again, it’s legal for debt collectors to act aggressively when trying to collect on debt, but it’s not legal for them to use threatening language. This is a direct violation of Florida’s Consumer Collection Practices Act. In instances when a debt collector threatens jail time or acts as a government official, such as an IRS representative, the debt collector is probably participating in a scam.

The Debt Collector Asks for Basic Information

When a creditor passes an account along to a legitimate debt collection company, they include some basic information about the debtor. This information often includes date of birth, an address, and a portion or full Social Security number. A debt collection company may ask for some of this information to verify the account, but they shouldn’t ask for all of it.

Debtors must be very careful with how much information they provide. This is because not everyone posing as a debt collection company is looking for money. Sometimes they are just looking for this information to steal a person’s identity or engage in other types of fraud. These individuals get information about the debt, but not the debtor, and contact the debtor in the hopes to extract as much information as possible from them.

The Debt Collectors Ask About Unknown Debts

There are valid reasons a debt collector may contact a customer about an account that the debtor doesn’t recognize. One reason is that after seven years, certain accounts will no longer appear on the debtor’s credit report. However, this doesn’t mean that they no longer owe the debt, or that debt collectors will stop calling. It simply means it won’t affect a person’s credit as significantly.

Also, people have many accounts with a lot of businesses. It’s natural to forget about some over time. A debt collector calling about an unknown or forgotten account doesn’t necessarily mean they are engaging in a scam.

Debtors should know, though, to never pay a debt they don’t recognize. Instead, consumers need to ask for proof of the debt. This is something every debtor has the right to and the debt collection company must send that proof. They must also show that they are authorized to collect on the debt.

The Debt Collector Is Not Found in an Online Search

When wondering whether or not a debt collector is valid or a scammer, it’s helpful to go online and perform a quick search using either the company’s name or phone number. Many consumer websites also allow people to leave reviews on certain debt collection companies. These comments often include the name of certain debt collection companies, and what business they are authorized to work on behalf of. If no information is found, or the only comments refer to a debt collection company as a scammer, consumers should not give them any money.

The Debt Collector Doesn’t Provide Their Contact Information

When a debt collector is a scammer, they don’t want to give up their information. While they may want to get as much information about the person they’re calling, they don’t want to reveal their own phone number or address. However, these are two very important pieces of information for a debtor. At times, they will have to call the debt collector, and they need the address of the debt collector to send a letter asking for proof of the debt and to make payments. Any legitimate debt collector will provide this information freely. If they don’t, they are most likely a scammer.

Consumers must vet any debt collector before offering information or making a payment. The debt collector must provide proof of the debt and, if they cannot, consumers should report the scam to the FTC and Florida’s Attorney General. In certain instances when a consumer has fallen for a debt collector scam and already sent money using a wire transfer or other untraceable payment method, the only way to recover that money may be through a lawsuit.

Contact the Florida Debt Defense Lawyers Who Can Help

If you have been scammed by an illegitimate debt collection company, call the Fort Lauderdale debt defense lawyers who can help. At Loan Lawyers, we want to help you recover any money you may have paid to scammers, and help you through any lawsuits you may be facing from valid debt collection companies. There are defenses to these types of accusations, and we want to apply them to your case to give you the best chance of success in court. Call us today at (954) 523-HELP (4357) or fill out our online form for a free consultation.

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Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation and find out more about our money back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.