Fake debt collectors are calling people with claims that their loved ones owe payments on a loan. According to reports received by BBB, scammers use threats of jail time to trick victims into paying up.
How the Scam Works:
You are at work or home and the phone rings. When you answer, the caller tells you that he/she works on behalf of a loan company. He claims to be collecting overdue payments taken out by your family member or significant other.
You tell the caller that you won’t pay the debt. But he starts to threaten that your loved one will be arrested and/or face other consequences, such as a suspended driver’s license or job loss. As much as you want to protector your loved one, don’t pay up!
Despite the threats, these “debt collectors” don’t have any power over you or anyone else. In most cases, the alleged overdue loan doesn’t even exist. Even if your loved one does owe money, paying the scammers won’t help reduce the debt. Below is advice on how to deal with these intimidating calls.
What to Do if You Receive a Harassing Call From a Debt Collector:
The best protection against debt collection scams is simply knowing your rights. Here’s a quick overview.
Ask the debt collector to provide official “validation notice” of the debt. Debt collectors are required by law to provide the information in writing. The notice must include the amount of the debt, the name of the creditor and a statement of your rights under the Fair Debt Collection Practices Act. If the self-proclaimed collector won’t provide the information, hang up.
If you think that a caller may be a fake, ask for his name, company, street address, and telephone number. Then, confirm that the collection agency is real.
Do not provide or confirm any bank account, credit card or other personal information over the phone until you have verified the call.
Check your credit report for by going to annualcreditreport.com or calling (877) 322-8228. This will help you determine if you have outstanding debts or if there has been suspicious activity under your name.
Tell your loved one to place a fraud alert on his/her credit report. If scammers have information like your name, relationship and phone number, they probably have a lot more.
File a complaint with the Federal Trade Commission if the caller uses threats. The Fair Debt Collection Practices Act prohibits debt collections from being abusive, unfair or deceptive.