Watch Out for Phony Debt Collectors and Fraudulent Debt Collection

Debt collectors are legally permitted to contact people to recover debt on behalf of businesses, creditors or individuals to whom money is owed. However, the Better Business Bureau has issued a warning to consumers that phony debt collectors and fraudulent debt-collection practices are growing concerns.

A recent report from a Midwest Better Business Bureau stated that debt-collection agencies receive the fifth-highest number of complaints filed with the BBB. And increasingly, identity thieves are masquerading as debt collectors to get and misuse people’s personal and financial information such as Social Security and credit card numbers.

Tips for Dealing with Debt Collectors

To avoid falling prey to illegitimate debt collectors’ scams, follow these tips from the BBB for dealing with debt collectors and recognizing debt-collector red flags:

  • Do not give any information to debt collectors who demand payment in cash or money transfer only, or who refuse to reveal their employers’ names.
  • Verify that the debt-collection agency is legitimate by searching for it on the Internet, cross-checking its contact information and looking at complaints lodged with the BBB. Confirm that the person calling is affiliated with the agency.
  • Request documentation of the debt to determine whether it is valid. Debt-collection agencies are required by law to provide a written validation notice and to verify debt details.
  • Beware of fake debt. If the alleged debt cannot be confirmed, it may be a sign of identity theft, and no personal financial information should be provided.

Phony debt collectors’ phone calls are harassing, threatening and can lead to identity theft, creating greater problems for people who are already struggling financially. If you have unmanageable debt, would like to stop creditors’ phone calls, or think you were contacted by a fraudulent debt collector, contact an attorney with experience in bankruptcy cases to discuss your circumstances and options.