Debt-collection scams exploit feelings of fear and helplessness to overwhelm unsuspecting victims. Be informed and keep yourself from falling victim.

How the scams play out

In a debt-collection scam, a scammer posing as a debt collector will call a victim to demand payment for an ‘outstanding debt’. The caller typically insists on a specific means of payment, usually a wire transfer or prepaid debit card. Of course, the caller is not a debt collector and any money they collect will go directly into their own pocket.

Some Red Flags

• The debt collector demands immediate payment.
• They insist on a specific means of payment, often times non-traditional, such as gift cards or cryptocurrency.
• The person knows or shares very few details about the debt.
• There is no contact information for the debt collection agency the caller allegedly represents.

Protect yourself!

Follow these tips to stay safe:

• When called by an alleged debt collector, verify the debt. Request written validation of the debt, including detailed information about the creditor, the amount owed and the nature of the debt. Legit debt collectors should be able to easily provide this info.
• Never share personal information with an unverified contact. If you’re asked to provide sensitive information by an unknown contact, it’s likely a scam.
• Check for licensing and credentials. Research the collector’s credentials and licensing status through your state’s attorney general’s office or consumer protection agency.
• Know your rights. Familiarize yourself with your rights under the Fair Debt Collection Practices Act (FDCPA). These laws outline the rules that legitimate debt collectors must follow when attempting to collect a debt.
• Keep detailed records. Maintain solid records of any communication you have with debt collectors, including dates, times, names, and contact details.
• Stay informed. It’s a good idea to check your credit report on a regular basis for any unfamiliar or fraudulent accounts. It’s also advisable to keep up with the latest scams so you are better equipped to identify and avoid them.

Dealing with a debt collection scam certainly isn’t fun, but it’s even worse when you wind up losing money. Always be on the lookout for scammers trying to take advantage of you.

Please contact your local office or your American Federal Banker for more information.