Are you receiving threatening phone calls about collection accounts you do not recognize? Are the callers especially abusive? You may not know it, but you could be a victim of more than just a collection law violator. You could be the target of the rapidly growing fake collection agency scam.
If you truly owe a debt, then you should make every reasonable effort to repay it. You will want to resolve the debt on your terms, not theirs. However, if you do not owe the debt, then you cannot allow yourself to be victimized.
Many collection calls use intimidation or threats to coerce you into repaying a debt. These actions are illegal. Many debtors have successfully sued debt collectors for FDCPA violations and won.
When the agency is not an agency at all, it can be difficult to determine whether or not the collection attempts are legitimate. There are some clear cut ways to make sure that you are dealing with a bona fide collection agency or attorney who is legally entitled to pursue collection of a real debt.
First, you will need to request verification of the debt. Upon request within the first 30 days of collection activity, a debt collector must supply you with proof that you owe the debt in which they are pursuing repayment for. Any legitimate debt in which you are denied your right to receive validation for could be cancelled if the collector fails to meet your validation request. So far, fake collection agencies have not gone so far as to send fake validation notices, but it is likely that this will occur in the future as these scammers become more brazen.
Second, you need to confirm that the collection agency is responsible for the collection of your debt. You could legitimately owe a debt, yet the debt could be assigned to a different collection agency. A scammer could, upon receipt of your credit report attempt to pursue repayment of a real debt owed by you that they do not have the rights to collect for. Contacting the original creditor to confirm the identity of the debt collector (name, address and phone number) should precede any payments to a debt collector to ensure that your payments will be properly credited.
Finally, check with regulators to ensure that the debt collector is legitimate and licensed to practice debt collection in your state. Even some legitimate debt collectors fail to obtain licenses in some states that they collect debts in. A scammer will certainly not be licensed in your state, nor will they have assigned any required surety bond with the state. The Secretary of State will be able to confirm whether the firm is compliant.
Since the fake collection agency scam is becoming so widespread, it is essential that you carefully note any and all contact from debt collectors. Write down phone numbers, save emails and file letters in a safe place. Never fall for any “official” sounding name, such as Federal Crimes Investigative Unit, United Financial Crimes Division or any other name that is designed to scare you.
Similar versions of this scheme involve criminals contacting consumers using a payday loan scam. They claim to have tracked down the person and threaten to call their employer, neighbors or family to embarrass them (all illegal actions).
Never send money until you know for certain that you are dealing with a fully licensed debt collector who has been legally assigned your debt. Otherwise, you could be out the money you sent and still owe your legitimate creditors.
Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.
Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.
In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.
Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!
Favorite quote:
"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."
Thomas Jefferson
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