By Craig T. Kimmel
It’s late and your phone is ringing off the hook. The caller ID reads a number you don’t recognize, but you pick up anyway. With someone calling at such a late hour, it could be important.
The unfamiliar voice quickly informs you that you owe hundreds of dollars on an unpaid debt – a debt you don’t even recall having. The debt collector says that, unless you pay immediately, bad things are going to happen.
So what do you do?
Coping with debt collectors is difficult enough, but surprisingly, the scenario depicted above isn’t unusual. How do you know if the call is legitimate?
These days, debt collection scams seem to be all too common. Even the FTC is warning consumers to keep an eye and ear out for scammers pretending to be debt collectors.
Recently, two debt collection firms were caught conning Latino consumers out of more than $2 million in “phantom debts” that are too old to collect, were never truly owed, or are unable to be proven as valid.
A number of phony debt collectors have been quoted as threatening people with jail time and legal retribution for unpaid debts that were completely fabricated, while others would pose as a legitimate debt collection firm, bilking millions of dollars from consumers.
Anyone can fall victim to fake debt collection calls, because the scammers are often very convincing.
They troll for bits and pieces of contact or financial information secured from public databases, or data that have been purchased illegally. Perhaps you were added to a list running through an autodialer to see if you could be their next victim.
Many of these scam artists claim you owe hundreds – or even thousands – of dollars for a debt you don’t remember or a debt so old you thought you paid it off years ago. They’ll pressure you for quick payment, or try to collect as much of your personal information as they can in order to steal your identity. They may even obtain the last four digits of your Social Security number and/or your banking information to empty your accounts or open new credit cards in your name.
To help you separate the scammers from the rest of the collectors, we have created a simple three-question checklist. Ask these any time you receive a call from a collector, and you likely will dodge any scammers trying to steal from you.
Question 1: ‘What is the name, address, and phone number of the company you’re calling from?’
If you are speaking with a legitimate debt collector, they will be more than willing to provide you with this information. Don’t let them proceed until they answer this question.
Phony collectors will avoid a concrete answer, as it forces them to reveal who they are and how they can be reached. The less you know about a fake debt collector, the better their chances are of tricking you into giving them your money or personal information.
Even if a caller gives you an answer, never discuss debts over the phone. Tell them instead to send you the “validation notice,” a letter that is required to be sent within five days of first contacting you.
Question 2: ‘What is the name and address of the debtor you’re trying to reach?’
Legitimate debt collectors know who they are trying to reach and should have no issue disclosing this information. On the other hand, a fake debt collector will rarely be able to provide you with an answer to this one, and if they do, the answer may sound suspicious.
If the debt collector can’t provide you with your own name and address, it is a red flag that something is amiss. Authentic debt collectors will have the information and, under federal law, are required to provide truthful information if you ask.
If you are provided the wrong information or incomplete information, do not correct the person speaking. Instead, tell them to send the verification letter to the address they have on file, explaining that you will respond accordingly once the letter is received. Then hang up.
Question 3: ‘What are the last four digits of the debtor’s Social Security number?’
This last one is somewhat of a trick question that will throw off most fake collectors. A legitimate debt collector will never answer this question, because if they do, they are violating the Fair Debt Collection Practices Act (FDCPA).
Meanwhile, a phony or illegitimate debt collector may attempt to answer this question – especially if they have the last four digits of your Social Security number. In some cases, they may simply claim they don’t have any info in their file and have no way of knowing it.
Never confirm such personal information with any debt collector over the phone. Social Security number, banking information, and other personal details can be collected and used to steal your identity.
Once a crook has your personal info, he can use it to open new credit cards and checking/savings accounts, to write fraudulent checks, or to take out new loans in your name. This can cause a slew of problems that are incredibly difficult to remedy and may have a dramatic impact on your credit score.
Don’t provide personal information even if collectors attempt to scare you into paying, threaten to have you arrested, or pose as a government official. These are all violations of the FDCPA and a clear indication the collector is not legitimate.
Remember, there is no such thing as being too careful with your identity and personal information.
What to Do If You Believe You’re Receiving Fake Debt Collection Calls
Once you’ve determined a fake debt collector is calling, hang up and never speak with them again, no matter what they say or how often they call.
If the debt is legitimate, it does not mean the person calling is entitled to collect the debt. Again, wait for the letter.
The best practice to avoid any problems is to ignore collection calls entirely. If you find yourself having answered the phone, tell them to stop contacting you. If the caller gave you their company’s mailing information, take a minute to send a letter that demands them to cease contact with you immediately.
The FDCPA requires debt collectors to halt communications if you send them a request in writing, and most legitimate debt collectors will oblige while phony debt collectors may not give you an address at all.
If possible, report all suspicious debt collection calls to the FTC. By reporting the phony debt collector, appropriate action may be taken to help ensure the fraudulent activity is put to an end.
Understand Your Rights
You should always tell the debt collector to send you a written letter to the address they have on file, but never offer your address, as they should already have it. Inadvertently giving your address to a scammer can only lead to trouble.
Under the FDCPA, debt collectors are forbidden from calling you repeatedly, or calling you before 8 a.m. and after 9 p.m. (unless you told them to do so).
Debt collectors are not allowed to deceive or imply that they’re from a government agency. They cannot say you have committed a crime, or that they will be serving you with papers. Obscene language is completely unacceptable, and they are not allowed to threaten or abuse you.
Debt collectors must always identify themselves as such in every telephone conversation. They must inform you that any information will be used to collect the debt.
Although collectors are only allowed to discuss a debt with the debtor, family members and friends may be called once, just to request information on how to locate you.
To the debtor, collectors are obligated to disclose the amount of the debt, the name of the creditor to whom you owe the debt, and the aforementioned “verification letter” confirming information relative to the debt, as well as a reminder of your FDCPA rights.
Choosing the Right Lawyer
If you are dealing with harassing debt collection calls, retain a consumer law attorney immediately, as you may be entitled to monetary compensation – up to $1,000. Experienced consumer lawyers offer their services free of charge and are paid by the debt collector as an additional penalty.
Your lawyer will contact the debt collector. They will also determine whether the debt is valid and due, helping secure the documentation you need to understand where the debt comes from and what charges are being sought for payment, such as interest.
The FTC recommends choosing an attorney who has experience. Do your research and ask whether you will be charged for the attorney’s time. It’s important to determine whether you will be expected to pay anything before forging a relationship with any law firm or attorney.
Regardless of whether you owe the debt, abusive collection practices are unlawful. If the debt collectors do not comply with federal and state laws, you are protected against their actions and are legally within your rights to pursue action against them.
It’s also worth noting that, when you tell a debt collector to deal with your attorney, they can no longer call you. Further correspondence will go through your lawyer.
Protect Yourself From Debt Collection Scams
Although debt collection scams are a major concern for consumers, there is plenty you can do to avoid becoming a victim. Knowledge is power, and you can use this knowledge to keep the fake debt collectors at bay, helping to prevent fraud and identity theft.
Keeping a level head and a record of your interactions are immensely helpful. Don’t be afraid to contact an attorney, as many of the best will provide you with a free case review. Don’t lose your cool, and be willing to report any suspicious debt collection activity to the FTC. Finally, take notes and keep a record of every interaction you have with the caller – this will support your case if you decide to make a claim under the FDCPA.
By raising awareness and showing fake debt collectors that we won’t fall for their tricks, we can make this country safer for consumers everywhere.
Craig T. Kimmel is a principal attorney for Kimmel & Silverman in Ambler, Pa., and a longtime consumer-rights advocate.