Remember that balance you owe on that thing you bought a while ago? You don’t? Well, the man on the phone is pretty adamant about it and he wants you to get this settled ASAP. He sounds pretty convincing and you’re beginning to think you should get this taken care of right away.
Welcome to the subculture of fake debt collectors; another community in the lowlife world of scam artists, cons and cheats. Their game is one of high-pressure phone calls and threats. In their own way, they’re among the worst of all the scammers out there because they so often resort to outright nastiness to get their point across.
Fake Debt Collectors Prey on Honesty
Ironically, as Scambusters.org pointed out, “[people who generally don’t pay their outstanding debts] probably wouldn’t fall for this scam, since they have no intention of repaying their creditors. But upright citizens may doubt themselves, thinking they’ve forgotten to pay a bill.”
That’s right: because you’re an honest and forthright sort who pays their bills because it’s the right thing to do, you are far more prone to fall for this ruse than your carefree neighbor who is 90 days behind on everything. This scam puts the lie to the old saying that “you can’t cheat an honest man.” Honest people are exactly with whom the conmen are going to achieve the most success.
Just because you like to keep your bills up to date doesn’t mean you should become a victim, however. Be wary of any debt collection call you get out of the blue.
Reasons You Don't Have to Pay
If you stay on top of your expenses, you have a pretty good idea of what bills are due when. You’re the sort of person who rarely, if ever, is surprised by the arrival of a bill. Therefore, when someone jumps you on the phone with a demand for a payment, chances are, it falls into one of these categories:
The debt is too old: It’s possible that, at one time, you did owe some money on this account, but the statute of limitations ran out on it many years ago. This is part of the “zombie debt” school of collection in which specialized companies go after consumers for ancient debts that consumers are no longer legally required to pay.
The collector cannot provide proof of the debt: When pressed for verification of the debt’s origin and history, the collector cannot provide it – either because it never existed in the first place or because the information they have is so dodgy, it’s really only just your name with an amount next to it.
The debt was wiped clean by a bankruptcy: Another zombie debt tactic. In this one, they demand payment for debts that were legally discharged because you filed and were granted bankruptcy protection.
The debt never existed: They just made it up. You never owed the money in the first place.
The debt has already been pad: They are trying to collect on a bill that no longer has any outstanding money on it. Either they have faulty information or they know you’ve paid and are just trying to get you to do so again.
How to Handle Fake Debt Collectors
The Federal Trade Commission has some excellent advice on how to deal with this sort of scamming and harassment:
Demand proof in writing. One of the reasons scammers operate via telephone and on the internet is that, if ever caught, they can at least avoid mail fraud charges. Therefore, if you ask them to send you written documentation of your debt, they might to protest that it’s out of the question or they’ll give up harassing you. The FTC suggests you ask for a written “validation notice” which details the exact amount you owe, the name of the creditor, the nature of the charges, and what your rights are under the Fair Debt Collection Practices Act. Ask the caller for their particulars: His name, his company’s name and street address and a phone number where he can be reached. Check them out with an internet search. A real company will leave a footprint.
Offer them nothing. Do not give them any financial or personal information. If you start feeding them personal data, such as bank account info or your social security number, they can use it to commit identity theft, which would probably be far more lucrative for them (and devastating for you) than bilking you on the fake loan scam they called about in the first place.
End the call. Once you have gotten the information on the caller – or they have refused to give it to you -- get off the phone. Mail them a letter stating they must cease and desist calling you. That’s your right by law and a real debt collector has to follow that law if you request it in writing. If they keep calling in spite of that, you’ll have even further proof they’re not on the up and up.
Check with the creditor. If they mention a creditor by name, it doesn’t necessarily mean they represent that creditor on a legitimate basis. If you think you might owe money to that creditor, check with them directly and ask them if this caller is an appointed representative of their company. This is another strong argument for making periodic checks of your credit report. If the alleged debt exists, it should show up on your report.
Report them. The FTC wants you to contact them to report any such suspicious calls. They also recommend that you contact your state’s Attorney General as well.
Jut in Case They Are Real...
As we have suggested, you’ll want to get more information from them than they get from you. A legitimate debt collection agency should have no reservations about providing their name, address and phone number or to responding to your request for the validation notice mentioned above. Once they’ve proven their authenticity in writing, you can proceed accordingly.