At best, dealing with debt collectors tends to be stressful. Every time an unknown number flashes on your screen or an envelope arrives in your mailbox, there’s the chance it’s a persistent debt collector trying to solicit payment. It’s even more challenging trying to handle debt collectors if you currently lack the funds to shore up your delinquent accounts.
But it’s important to be aware there’s another layer to dealing with debt collectors: Figuring out the difference between legitimate debt collectors and scams. After all, the last thing you want to do is hand over your hard-earned money to an entity pretending to be a real debt collector.
Here’s more on what you can do to determine if a debt collector is legitimate or a scam
Know the Debt Collection Scam Red Flags
Knowing some red flags that signify potential debt collection scams can help you better differentiate between genuine collectors and bad actors hoping to make a quick buck.
Red Flag #1: Unfounded Threat
It can be downright nerve-wracking to get a phone call from someone claiming they can make your life difficult if you don’t pay immediately. Your instinct may be to jump into action to make the problem go away. However, it’s important to pause and remember that debt collectors must refrain from making false threats in an attempt to secure payment.
The Fair Debt Collection Practices Act (FDCPA) actually prohibits collectors from threats to have you arrested, threats to do things that cannot legally be done or threats to do things the collector has no intention of doing. Scammers may resort to threats to scare you into paying on debts you don’t actually owe — instead of responding right away or sending payment, ask for verification of your debts in writing to make sure the operation is legitimate.
Red Flag #2: Withholding Information
A legitimate debt collector should have no problem providing the exact details of the debt on which they’re trying to collect in writing — like the name of the original creditor and how much you owe. If you do not recognize the debt as your own, you then have the opportunity to dispute it.
Keeping a record of your debts by creditor and amount owed is a smart practice anyway, as you’ll need to know this information to avoid debt scams, enroll in a settlement program like Freedom Debt Relief or sign up for a debt management plan through a credit counseling agency. Knowledge is power when it comes to handling your debts.
Red Flag #3: Harassment
Put simply, debt collectors are prohibited from harassing consumers by law. For instance, reputable collectors will avoid calling outside the window of 8 a.m. to 9 p.m. — while scammers may continue to hound you at all hours of the day.
Debt collectors following the rules know they’re not allowed to tell most third parties about your debt without your permission. However, scammers may either threaten to tell your employer, family members or friends about your debts in an attempt to evoke a fear response from you.
What to Do When a Collector Calls
Here are a few actions you can take to protect yourself against scams from NOLO:
- Keep a record of all communications with collectors.
- Avoid providing personal and financial information— like your Social Security Number or bank account information — right away.
- Request verification of all debts before deeming them valid or making any promises to pay.
Protecting yourself is a matter of doing your due diligence to make sure a collector is legitimate. Know your rights under the FDCPA and the red flags indicating a scam may be afoot.