6/14/2011 4:09 PM ET|
Is that 'debt collector' a scammer?
If someone calls and demands payment for a debt you weren't aware you owed, don't just pay up -- ask questions. Here are 8 ways to tell if the collector (and debt) is legit.
That angry voice on the phone insists you owe a debt you've never repaid. But you don't recognize the debt or the collector.
Before you apologize or promise to pay, consider another scenario: It's not your debt at all.
Both scenarios pose problems for consumers, advocates and regulators.
"It's increasingly becoming more common," says Nadine Samter, an attorney with the Federal Trade Commission. Much of it is unintentional: debt buyers who haven't done their due diligence, she says. But some of it is phishing, she says. Con men "get an account number and just try and get money."
So how can you tell if that letter or phone call is a genuine debt, a case of mistaken identity or a scam? There are a number of handy tricks you can use. Here are eight.
1. Shift the conversation
Whether it's a real debt or a scam, the caller is going to ask questions. Put on the brakes and ask a few of your own. A legit collector will answer.
"No matter who calls you, you don't give out account information and you don't confirm information," Samter says.
Legally, the onus is on the caller to provide the details to back up the claim. "You need to ask what the debt is from," says Sonya Smith-Valentine, an attorney with Valentine Legal Group in Largo, Md., which represents consumers in debt collections.
"They've got to give you some basis" for the debt, she says. "If they're not doing that, there's something wrong. You want to turn the conversation into a fact-finding mission on your end. Keep peppering them with as many questions as possible."
A real collector should provide the basics: name, company name, address and phone number.
But scammers might refuse. "Sometimes they will say 'no,' or that they've already sent the information," Smith-Valentine says. "Sometimes they'll come out and say, 'We don't have to.' But that's not true. If somebody is pushing back that hard, it should set off some red flags."
2. Get confirmation
A genuine debt collector has five days from the first phone call to send you written confirmation of the debt. Most send the letter first, then call, says Joel D. Leiderman, senior associate attorney with Forster & Garbus in Commack, N.Y., which handles debt collections for creditors.
That confirmation letter should be more than a demand to pay, he says. It should also spell out some of your rights and include information on the collection agency, such as the company name, mailing address and phone number, Leiderman says.
3. Verify that the agency exists
Even if the collection agency is legit, the debt still might not be yours. Collectors make mistakes. But at least you can make sure the debt isn't an outright scam.
Plug the company name and/or the phone number into an Internet search engine. Contact your state attorney general's office or department of consumer affairs. Is the company licensed or allowed to work in your state? Have there been complaints about it?
If the collector claims to be with an attorney's office, check out the firm with the state bar association or the office of court administration, Leiderman says.
If it is legit, you may also want to call and verify that the company contacted you. Some scammers will claim to be from genuine collection firms or attorney's offices, he says.
At the same time, don't share any personal information until you decide how you want to handle the matter.
If you suspect a scam, you can file a report with the police and the state attorney general's office. You can also report bogus debt collection to the Federal Trade Commission.
VIDEO ON MSN MONEY
They all say the same thing, "it's been assigned to us for collection". But who are they and how do you know if you are paying the right people?
Chances are good that you could write a check to XYZ collectors and still be chased by another collection company who does have the propriety to chase you. Then you will have to pay twice.
Yes, you might theoretically have a case against the scam collector. but just try to find them and get a judgement. Fergeddabouddit.
Anybody here from Minnesota? Then listen up. This may concern you, or a family member or your aging parents, or your helpless neighbor suffering from an eternal sickness who may have a charged off account from one of the leading banks.
There is a thriving business in Minnesota. That is debt collectors pretending to be attorney's on the phone but they are not. They work under the guidance of attorneys. In fact these firms work with large banks such as JP Morgan Chase, Discover, Capitol One, name a few. Law firms are now hiring these scum bags to contact these banks and they buy or even worse "represent" charged off accounts for 10 cents on the dollar. Then they collect all personal information on the person and use that to demand a full payment of the debt within 30 days, or else with a riduculous law suit. The sad truth is these firms and their representatives are "Legal Crooks" in other words "scum bags". They have perfect cover under Minnesota law since these collectors are own and operated by legitimate law firms. They use the name of law to make money, on the helpless and less fortunate, destroying struggling families.
The state attorney general's office seem too busy with the state shutdown fiasco, so there isn't a lot of resources out there to police these legal crooks or provide immediate advice on statute of limitation, etc. Any advice would help all Minnesotans, who are helpless and not have the courage to ask for help. These scumbags should be stopped !!
What about the innocent family member that gets the continuous phone calls looking for a son, daughter, etc., especially with these d__n automated systems that don't provide ID for the company or a way to call back.
I feel that this can lead to more scams in the collection of debt and more looking for personal information for ID theft, while making it harder to collect on legitimate medical debts.
Is this article headline/title supposed to be rhetorical? All debt collectors are scammers...duh...
I was laughing at this guy because it was obvious this was a scam and it made him mad and threatened to have the law arrest me. I told him go on and do it then ....lol
They had my address and place of work and that is scary in itself. Finally I got tired of listening to this guy and told him to go to hell and hung up....Now i get no more calls.
I then went to the BBB and found information on just this situation also . Here is the link to the BBB information in Arizona.
I've had this happen to me . I got a letter in the mail ..saying I owed 200.00 for some credit card ..but I know I didnt owe any credit card compay for any outstanding debt. the debt collector said ..they bought my debt and I had to pay or they sue me :p ..i ask them to send me a full copy of the Bill from the credit card compay they bought my debt from..they said, i've had plenty of copies sent tome already..and they werent sending anything else..if I didnt pay them with in a week..they would sue me . i told them i never had a credit card with the company and they must have the wrong person ..so the lady on the phone ask me if i could give the last four digs of my S.S number " O.o" to comfirm it was me or wasn't..seeing it could be the had the wrong person .. " I didnt give it her" told her no..i don't give that out to companys I don't know of ..she tired to say nothing bad could happen by giving those numbers.."we all know is BS" with those four numbers,your full name and address someone can get in to your bank account or have credit card resent to any where in the world..by saying they lost them and there on vaction :/
to make it more funny... My boss got the same type of bill from the same company about two weeks after i got mine "LOL" but he knew what happen to me ..show me the letter he got..was the same expect his said he owed 600 ;P...
btw - we did report them the Postoffice for mail fraud"scam"
makes me wonder how many people fell for it????
Better Business Bureau is issuing a national alert today about phony debt collectors that are calling consumers nationwide and claiming that they have defaulted on a payday loan and will be arrested if they don’t pay immediately. Claiming to be lawyers, the scammers say they are with the “Financial Accountability Association” or the “Federal Legislation of Unsecured Loans” and are equipped with a disconcerting amount of personal information about their potential victims.
“Because the scammers have so much information about potential victims, BBB is concerned that this may be the result of a data breach,” said Matthew Fehling, BBB President/CEO. “Thousands of people may have had their personal information compromised, and given the scammers’ tactics, it appears that those who have previously used payday loan services could be particularly at risk.”
According to reports received by BBB and posted online, the scammers accuse the victim of defaulting on a payday loan and claim they are being sued. The phony debt collector threatens that, if the victim doesn’t pay as much as $1,000 immediately via wire or by providing bank account or credit card numbers, he or she will be arrested and extradited to California within the hour to stand trial. The scammers often have the victim’s Social Security, old bank account numbers or driver’s license numbers as well as home addresses, employer information and even the names of personal friends and professional references.
BBB offers the following advice to consumers if they receive a suspicious telephone call about an outstanding debt:
· Ask the debt collector to provide official documentation which substantiates the debt.
· Do not provide or confirm any bank account, credit card or other personal information over the phone until you have confirmed the legitimacy of the call.
· File a complaint if the caller is abusive, uses threats or otherwise
if you believe a debt collector is trying to scam you."
There is information from phone companies that can help you with unwanted phone calls or numbers that do not leave identication of who is calling.
IRS says if those 1099Cs that were suppose to have been mailed out to the consumers and IRS, debt collectors don't own the debt. Until those tax forms get to the IRS for the tax year they were wrote off then collectors can't collect on them legally.
Then one has to go back to their original agreement which says they do not sale the account to third parties. This might be the hold up on 1099's not going out from the banks. By law, they cannot sale these accounts even after they wrote them off as bad debts.
Copyright © 2014 Microsoft. All rights reserved.
RECENT ARTICLES ON DEBT MANAGEMENT
CNN Money has a list of service providers it says you're expected to tip. See if you agree with these.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'