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Beware this phantom debt collection scam

Fraudsters are trying to collect on phony debts by harassing your family and friends.

By MSN Money Partner Jul 8, 2014 2:37PM

This post comes from Krystal Steinmetz at partner site Money Talks News.


Money Talks News on MSN MoneyScammers trying to coerce people into paying phantom debts are expanding their intimidation techniques by calling and harassing victims' friends and family.


According to the National Consumer League's Fraud.org, callers impersonating debt collectors are hoping that social pressure or the fear of losing a job will push victims to fork over the money to pay off the fictitious debt.


Boy wearing sheet for Halloween ghost costume © Thinkstock/Getty ImagesSo how do scammers obtain people’s personal information, including the names of loved ones and employers? Surprisingly, it's actually coming from the victims -- unbeknownst to them, of course. Fraud.org said:

Scammers may be acquiring contact information for a victim's employer or family members through bogus online payday loan applications. Information about consumers who have previously been defrauded (is) also sold and traded among scammers. These so-called "sucker lists" can contain information such as a consumer's home and work address, phone number, occupation, and information about how much money a consumer has spent on previous fake offers.

Debt collectors calling family members and friends is a red flag that something fishy is going on. "Under the federal Fair Debt Collections Practices Act, it's illegal for debt collectors to discuss a debt with anyone but the debtor without permission, but since scam artists are generally trying to collect debt that doesn't exist or is owed to someone else, they don't really give a hoot about following the letter of the law," Consumerist said.


Victims of these debt collection scams are being cheated out of much more than pocket change, Fraud.org said. Between October 2013 and June 2014, victims lost an average of $1,748.


These tips from Fraud.org will help you protect yourself from becoming the next victim of a debt collection scam:

  • Personal info. You should be wary of sharing your personal information, like banking information or credit or debit card numbers, on the phone. If a "debt collector" asks for this information, it's likely a scam.
  • Payday loans. Be careful when you apply for payday loans online because they could be bogus sites. You risk exposing sensitive information about yourself that can be used by criminals.
  • Proof of debt. Ask for written proof of the debt you owe, which is an especially good idea if you're unsure that you owe anything.
  • Check it out. If you're not sure you’re talking to a legitimate debt collector, hang up the phone. Then look through your loan paperwork and call the appropriate lender directly.
  • Identity theft. If you are contacted by a scammer, there’s a good chance your personal information has already been compromised. Check out the Federal Trade Commission’s step-by-step process for recovering from identity theft here.

Have you or someone you know been a victim of a debt collection scam?


More from Money Talks News

3Comments
Jul 8, 2014 4:48PM
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"So how do scammers obtain peoples' personal information...?" 
Companies are selling your personal information faster than you can blink. And the majority of it comes from so-called public service/government-oriented entities.
The "Do Not Call Registry" is one of the biggest offenders. My mom asked me to register her phone number, because she was getting a couple of telemarketing/scam calls a week. After registering her number, those calls are as many as five to ten per day. I got a new number two years ago. Haven't registered it with the "Do Not Call". I receive maybe two to three telemarketing/scam calls a year. I had been receiving as many as five per day on my old number that was registered.
Jul 9, 2014 11:23AM
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Suckers list?  Obama voters fill this bill!
Jul 9, 2014 11:42AM
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I agree with I_Want_to_Be_a_Clone, the "Do Not Call Registry" is a failure.  It originally promised that all telemarketers would be required to make sure that a number was not on this list BEFORE calling it, and that substantial penalties would be imposed for violations of this law.  Now, it is apparently acceptable for companies to say "Ooops, I never checked that list" (based on personal experience with sales calls) and, I understand, that there has to be a series of repeat violations (who knows how many?) before fines are imposed.

And think about this:  since the Do Not Call Registry has to made available to anyone claiming to be a legit telemarketer, how convenient for some crooks---who care nothing about following the law---to obtain valid phone numbers of potential victims that may not be in published phone books.

I, too, will never again put my phone number into the "Do Not Call Registry", another government-run failure.
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