According to a 2014 federal survey, harassment from phantom debt collectors is the second most complained-about financial problem reported by consumers, following identity theft.
If you are contacted about a debt that is not yours, you may be the target of a debt collection scam. Phantom debt collectors – so called because they are difficult to track—are scammers. Scammers try to obtain large payments and financial information from you by posing as legitimate creditors. Protect yourself and your financial security by learning how to spot and avoid these debt collection scammers.
Recognizing Phantom Debt Collectors
Often phantom debt collectors reference generic types of debt like student loans and mortgages, hoping you will believe that you have missed a payment. If that tactic fails, the phantom debt collector may try to convince you that a loan was taken out in your name, leaving you responsible for an identity theft scheme.
Try not to react before you fully assess the situation—you should never pay an unknown caller over the phone. A legitimate debt collector would never employ the following tactics, so consider these as signs of a debt collection scam:
- They threaten you with arrest or lawsuits. It is common for phantom debt collectors to try to threaten or bully you into handing over your money. They are assuming that you do not understand the laws surrounding debt collection and will be easily overwhelmed.If you are on the verge of being sued or arrested, a legal representative would serve you with paperwork. Ask the caller for copies of this paperwork, the name of their company, their attorney, and to whom this debt is owed. If they refuse or cannot tell you, you are most likely the victim of a debt collection scam.
- They refuse to provide information. The Fair Debt Collections Practices Act (FDCPA) requires debt collectors to provide information about the creditor’s name, address, and phone number. Ask for this information – and if they do provide it, make sure to verify it.The FDCPA also requires that debt collectors honor requests to send written information and provide you time to look it over. You can also send a written request that they cease calling you, and they are legally required to honor that request. If they continue to call you or refuse to mail you their information, this is a red flag.
- They use abusive tactics. Harassment, name-calling, threats of harm or abuse, and calls in the middle of the night are all direct violations of the FDCPA. If you are experiencing extreme harassment, report the caller to the Federal Trade Commission. Write down their name, gender, phone number, the time of the call, and any other identifying information.If you fear for your safety or the safety of your family, report the harassment to the police, block the number if you are able, and consider changing your phone number. This is illegal harassment, and you do not have to live with it.
Keeping close track of your financials and credit reports is the best way to combat debt collection scams. Order a free yearly credit report from Experian, TransUnion, or Equifax so you know exactly what appears on it. Replying with confidence and a firm, “you have the wrong number,” during the first scam call can derail phantom debt collectors, who will move on to easier prey.
If you have questions about debt collection scams or phantom debt collectors, contact McHughes Law Firm at 501-376-9131 to speak with one of our experienced debt collection attorneys.