Debt collection is necessary to remind a consumer that they owe money that should be paid. Debt is a responsibility that any individual should respect because the inability to pay one only disrupts the system and the process that reinforces it.
However, some people and entities exploit debt collection to steal money from unsuspecting consumers. They commit debt collection scams because they know that most consumers are wary of debts which progresses into an issue most of the time.
This problem remains widespread even today, as proven by the number of fraud reports that debt collectors generate to the U.S. Federal Trade Commission (FTC). The best way to avoid falling victim to this scam is to know if someone attempts to do it to you.
There are tells that reveal if a debt collector is out to scam you. Arm yourself with that information to defend yourself against their schemes.
Debt collection scam red flags
Most of the time, scammers who commit fraud through debt collection do the same things. They fabricate lies and use emotion to steal money from consumers. Here are the usual things fake debt collectors do when they contact you and attempt to scam their way to your pocket:
- Harassment and abuse
There have been instances where legit debt collection agencies use illegal and abusive tactics to do their job. That’s why laws were enacted to lay restrictions to prohibit such practices. There’s a line that debt collectors can’t cross, and if they do, you can hold them accountable.
On the other hand, scammers will use over-the-top and blatant threats. These threats are most likely false, especially with state restrictions in place against collection lawsuits, repossession, or freezing of bank accounts.
- Demanding immediate payment
Legitimate debt collectors will want to receive the payment for your debt as soon as possible, but a scammer will insist on receiving payment immediately. They’ll use threats to make you pay on the same day they reached out to you about your debt. A legit debt collector will rarely use those tactics to make you pay up on the same day.
- Accepting payment through single way methods
Scammers only accept payment through untraceable means. Legitimate debt collection agencies will accept payment through typical ways such as credit or debit cards because they’re more secure for consumers. Scammers prefer untraceable payment methods like gift cards or money transfers, so they can easily run away with the money they stole.
- Refusing to share contact information
Real collection agencies will not hesitate to give you their contact information. If you ask for contact details and they refuse, they’re likely scamming you.
- Referring back to the original creditor for information
If the collector who contacted you refers you back to the original creditor, they’re likely fake. A third-party collection agency should know at least the basic information about your debt. They should know this because otherwise, they can’t be able to tell you the debt you owe.
What to do when you spot these red flags
If you got a feeling that you’re being scammed, don’t give in to any threats. Instead, proceed to ask them more questions about the debt they’re claiming and confirm their identity.
If they’re using your creditor’s name, you can also contact them to know for sure. You can also ask for a validation letter to get confirmation about the said debt.
Another practice you can do to avoid debt collection scams is to keep track of your debts. That way, you’ll know if the debt collector who reached out to you is talking about a legit debt.
You can read more about debt collection scams here at Consider The Consumer to stay informed about recent fraudulent schemes.
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