Debt collectors are notoriously aggressive and often resort to unscrupulous tactics to get consumers to pay what they owe. According to the Federal Trade Commission, over 154,272 debt collection reports were received in 2021, with 50.1 percent of these reports relating to abusive debt collection activity or a debt not owed by the consumer. This makes it all the more important for you to be aware of your rights when it comes to dealing with debt collectors.
Most debt collectors are honest and just trying to do their job. However, there are a few bad apples out there who might try to scam you. That’s why it’s important to be aware of the red flags that could indicate fraud. By knowing what to look for, you can protect your finances and keep your personal information safe.
6 ways to spot collection scams

You may be alarmed to receive a call, email, or letter from a company claiming to be a debt collector. However, there are some telltale signs that you can look out for, which will indicate whether or not this is a scam.
1. They pressure you
There are all sorts of scams out there, and you need to be on the lookout for them. One type of scam is the credit collection scam. This is where someone tries to trick you into paying them money that you don’t owe. They might do this by using scare tactics or by making you feel guilty.
There are both good and bad debt collectors out there. The good ones may be aggressive at times, but they will never threaten you with jail time or anything else. On the other hand, scammers will try to scare you into acting quickly without thinking or asking any questions. According to Thomas Nitzsche, a financial educator at Money Management International, a nonprofit credit counseling organization, this is a major red flag.
Debt collectors are not allowed to use harassing, oppressive, or abusive tactics to collect on a debt, regardless of whether you owe it or not. This includes threatening you with jail time, bodily harm, or using profanity.
They are also only allowed to call your home or workplace between 8 a.m. and 9 p.m. in your time zone and must stop calling you at work once you tell them to do so. Furthermore, repeated phone calls intending to annoy you are also prohibited by federal law.
2. They won’t give you their contact information
Debt collectors are not always reputable companies. Sometimes, they may have fake websites and reviews. It is important to ask the caller for the debt collector’s company name, address, and phone number so you can confirm their identity.
Beware of scammers posing as collection agencies. They may try to distract you from your questions and insist that the debt needs to be paid immediately. Legitimate agencies will always disclose their company information and identity upon request.
3. The debt isn’t yours
When you’re dealing with a debt collector, it’s important to make sure that you’re not being scammed. You can do this by asking for the creditor’s name and the amount you owe. By law, debt collectors must provide this information to you.
It’s important to stay on top of your credit report, especially when you have defaulted accounts. You can check to see which debt collection agencies your accounts have been sold to and reach out to the original lender or creditor for more information. This way, you can stay on top of your debt and make sure it’s being managed in the best way possible.
4. You didn’t receive a letter in the mail
There are a few things you can do to protect yourself from debt collectors and scams. First, always ask for verification of the debt. This is a letter that all debt collectors must send within five days of first contact with a consumer. Secondly, keep track of your mail. Once you know a debt has gone to a collector, you should receive a formal notification in writing. Finally, be suspicious of anyone who contacts you out of the blue and demands payment.
A letter from a collection agency should disclose:
- The debt amount in question
- The creditor who is owed the debt
- A disclosure statement gives the consumer 30 days to dispute the debt.
Keep any letters you receive from scammers. They can be helpful to refer to should you be contacted by one in the future.
5. You’re asked to pay by prepaid card or money transfer
Prepaid cards, money orders, and money transfers are often the preferred payment method for scammers. These forms of payment can’t be traced, which gives scammers a very good chance of getting away with your money. Be on the lookout for requests for unusual payment methods.
There are a few things to keep in mind when you’re paying a debt collector. First, make sure you pay in a way that you can verify later on. This way, you’ll have proof of payment and how much you paid.
6. They threaten to tell your co-workers, friends, and employers about your debt
Debt collection agencies are typically not allowed to share details about your debt with most people. This protects you from having your debt used as a way to coerce you into making an immediate payment. However, there are some exceptions to this rule. For example, debt collectors can threaten to collect payment from your parents to get you to make a payment.
The Fair Debt Collection Practices Act protects consumers from being harassed by debt collectors. Under the law, debt collectors are not allowed to contact your employer or family members about your debt. They can only inquire about your whereabouts.
4 ways to protect yourself from debt collection scams

There are a lot of ways that debt collectors can try to scam you, but there are also a lot of ways that you can protect yourself. Here are some tips to keep in mind:
1. Contact your creditor
There are a few things you can do to figure out whether a debt collection letter is real or fake. First, reach out to your creditor and ask for more information about the debt in question. This way, you can compare the company that contacted you with the one your creditor has on file. Second, always request a validation letter or confirmation of the debt before taking any further action. This will help you verify that the letter you received is legitimate.
2. Check your credit report
Check your credit reports to confirm the debt that the collector is mentioning is actually on there. You can obtain free credit reports from all three main credit bureaus–Experian, Equifax, and TransUnion–by visiting AnnualCreditReport.com.
Even though the majority of debt is reported, some debt collectors do not relay this information to the credit bureaus. Therefore, even though the debt may technically still be yours, it may not show up on your credit report. In this case, you would need to do additional research to look into the validity of the debt.
3. Don’t disclose any financial information
It’s important to be careful with who you share your personal and financial information. Before giving out any details, make sure you know who you’re talking to and that they are legitimate. Ask for their name, the company they work for, and how to contact them directly. A phone number or email address should be sufficient.
There are a few things you can do to spot a fake debt collector. First, ask for information. A legitimate company will be happy to provide it. Next, try contacting them by phone or email. Deadlines and bounced emails are warning signs that the company may not be legitimate. Finally, avoid giving out any financial or personal information until you’re sure the debt collector is real.
4. Stay calm and know your rights
Dealing with a debt in collections can be difficult and embarrassing, but it’s important to take your time and not rush into anything, according to Nitzsche.
“A legitimate debt collector should be able to provide you with documentation that shows where the debt came from, when they acquired it and how they arrived at your current balance,” he says. “Always ask for this verification as soon as collection attempts begin.”
Debt collectors must follow certain rules when trying to collect a debt from you. These rules are set by the Fair Debt Collection Practices Act. For example, a collector must identify themselves when they contact you. They also can’t try to contact you at an unusual time or place or communicate with anyone about your debt except for your attorney, the attorney for your creditor, or the collection agency.
It’s helpful to know your state’s statute of limitations on debt. This is the amount of time a creditor has to sue you for the debt. The statute of limitations can be anywhere from three to 10 years. “If the debt they claim you owe—legitimate or not—is beyond the statute of limitations, the collector can attempt to collect but cannot sue you,” says Nitzsche.
How to report fake debt collectors

There are ways you can fight back against scammers who try to take advantage of you.
1. Keep a paper trail
It is important to keep track of all communications with collection agencies. This includes making a note of the date and time of phone calls, saving emails and texts, and gathering letters and any other correspondence. In some states, it is legal to record phone calls. The more information you have, the stronger your complaint will be should you need to file a report.
2. Reach out to your state’s attorney general
The attorney general’s office is aware of the potential for scams and is working to prevent fraudsters from taking advantage of consumers.
3. Submit a complaint
There are a few things that can be done to report a fake debt collection agency. The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) are two organizations that handle these types of complaints.
As of November 30, 2021, debt collectors will be able to contact you through email, text messages, and social media direct messages – a big change from the current rules. According to Nitzsche, this will have a major impact on how debts are collected.
As we increasingly communicate via new methods, the likelihood of scams also increases. Be cautious and remember your rights to protect yourself from becoming a victim.
The bottom line
Don’t agree to repay a debt just because a collection agency contacts you. First, make sure you owe the debt – you could be dealing with a scammer who’s trying to take advantage of innocent people. Also, learn about common scams and what to look for, so you can protect yourself. Finally, report any fraudsters to your state attorney general’s office, the FTC, and the CFPB.
Debt collectors can be aggressive and persistent, especially if they believe that you owe them money. It’s important to know your rights when dealing with debt collectors and to file a complaint promptly if you believe that your rights have been violated.
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