How to Tell the Difference Between Debt Collectors and Scammers


Scammers posing as debt collectors are a recent trend that is particularly thriving. Con artists assume the role of debt collection agents in a bid to extract money from consumers, who are caught off guard and end up getting swindled.

Although there are those who are unable to discern the difference between authentic and illegitimate representatives, scammers often use tactics that border on harassment. This is done to ensure the compliance of customers.

In addition, there are collection agencies that, for the most part, are considered legitimate, but they have to adhere to strict rules set forth by the Federal Trade Commission (FTC). Any violation could lead to a loss of their license and/or a lawsuit by the person they were calling.

If you do feel that you are being harrassed. Hang up and call the FTC at 1-877-FTC-HELP or go online to ftc.gov/complaint.

How They Work

In terms of performance and nature, debt collection scams can be quite precise. Fraudsters make routine phone calls to consumers to enquire about debt collection. The latter generally fall into the trap since the scammers already have access to their information in many cases. This is how they can ascertain if you are in debt and initiate a correspondence.

For instance, a swindler may pose as a representative of a given bank and may cite a specific amount that you owe to that financial institution. This type of fraud may be done via a phone call or email, called phishing and is prominent in the hyperspace world of the Internet. The scam may also be from someone who says he’s from the IRS or Treasury Department. Many people fall for this type of criminal activity a may complete the transaction under the assumption that the personnel on the other end are employees of your creditor.

The scam may come to fruition there and then and it will only be divulged at a later stage that it was all an elaborate ruse to extract funds. The result is that not only did the victims just give the scammer their money, but they also gave away their identity as the fraudster will have no doubt asked the consumer for his/her birthday, social security number and/or other private information. If you do get notified that you owe money to a financial institution, do not give out any information to the caller or if it came in an email, do not click any link or download an attachment, but immediately contact the bank using the official contact number that you have on your credit card, debit card or bank statement.

In the case that they say they are from the federal government, know this - any branch of the federal government, especially the IRS will never call or email you. They will instead send you a written notice.

How to Recognize These Scams

Another loophole that scammers take full advantage of is that firms often employ third-party agents to pursue debts that are unpaid. This gives scammers extra leverage and enables them to easily work their way through a transaction without being caught.

Naturally, there are techniques consumers can use to gauge whether the debt collectors are sincere or fraudulent.

The Collector Acts in Haste

Years ago, debt collectors would be tough and arrogant when speaking to you about the money that is due, but these days, they are much more polite and professional, so if the collection representative does act belligerent or persuasive, be wary and take that as a red flag. Several collectors will use compelling methods to convince consumers to pay the debt they owe. This is logical since their own income may depend on seeking and accumulating debt from consumers. However, if they exercise extraneous pressure, then that may well be an indicator that a scammer is at play. For example, if a debt collector threatens the consumer with a lawsuit or other unwarranted prospects, then he may be attempting to scam you. A legitimate debt collector will try to find a solution as opposed to being aggressive and ominous. To ensure that you are not duped into paying a deceitful representative, hang up and call the financial institution for verification.

They Ask for Payment through Different Methods

This is another illustration where scammers assume the identity of debt collectors. Once they contact a consumer, these hustlers may inquire about the preferred means of payment. Quite often, they may suggest that a wire transfer should be arranged or any other untraceable method can be adhered to. They may even ask for the money to be sent in bitcoins.

As opposed to giving the consumer leeway to choose their own method of payment, which can range from a check to a debit card, scammers will insist on choosing an arrangement which leaves no sign. If the payment can’t be traced, then that overwhelmingly favors the fraudster. This will also mean that consumers who are conned will be hard pressed to prove that the transaction had transpired to begin with.

The Creditor Evades Identification

Over the course of time, it is possible for an individual to have multiple accounts at a combination of banks. It is also very much possible that a person may have forgotten one of these accounts. This presents an opportunity for scammers.

They will masquerade as creditors to swindle consumers. If they sound completely unrecognizable or provide details that you cannot decipher, then the chances are that they are trying to con you. This is where common sense should prevail on the consumer’s end. They should exercise their prerogative to request and obtain proof of the debt. If the evidence provided is not substantial, that should set the alarm bells ringing.

Debtors can also check their own records like their financial statement to gain conclusive evidence of the creditor. A caveat here is that records may only be available until a certain date in the past and it is possible that the transaction was completed prior to that. In such instances, consumers must seek debt validation from those on the other end. This means they have to provide proof that the debt exists and they possess the authority to collect it.

You Are Unable to Find Creditor Information Online

The internet is an information gateway bar none. It is the one stop shop encyclopedia which contains a wealth of data beyond compare. If consumers want to find relevant knowledge, they may look online. However, if they owe a debt and the collector comes calling but the latter’s information is not displayed online, there may be an issue at hand.

Businesses comprehend how imperative the internet is to relay information to prospective consumers. This is the main reason that a company without any presence online will incite considerable suspicion. On the other hand, if consumers manage to find a link with information, it may contain negative reviews of the creditor, which can be a crystal clear indication that they are scammers.

The Collectors are Particularly Menacing in Their Demeanor

If the debt collector comes across as intimidating and hostile, that may be a certain sign that they are trying to con you. In particular, those who pose as government officials may use such tactics to petrify their victims in a bid to draw out their cash.

Consumers should be made aware of the fact that is it downright illegal for a debt collector to threaten anyone with imprisonment since it is beyond their capability or pay scale. They must also not lie to consumers or issue empty threats that they cannot follow. This is another way consumers can observe if the debt collector is a scammer since they are not concerned with following rules and regulations and only care for the money they can unlawfully collect.


Posted On July 8, 2018