Monday, April 25, 2011

Beware Phony Debt Collectors

It's bad enough that you've fallen behind on bills and you're getting "dunning" calls from debt collectors - an experience all-too-common during my childhood.

But it could get worse. Of all the complaints reported to the Better Business Bureau, collection agencies place in the top five. And phony debt collectors - criminals trying to steal your identity - are proliferating.

"Oftentimes, scammers will impersonate legitimate debt collectors to illegitimately obtain financial information. These fraudulent calls can be harassing and threatening," the BBB says.

Here are some red flags that should help you identify fraudulent debt collectors:

Get documentation to help determine if the callers are actually identity thieves or if a debt is actually owed.

By law, a debt collection agency must provide a validation notice within five days of contacting you about the debt. Within 30 days of receiving their validation notice, send the debt collector a written request to further verify the debt details.

Do not provide personal or financial information unless the validity of the debt and the debt collector has been confirmed.

Get the debt collector's name and contact information to research the agency further. Search on the Internet to see if they have a website or a BBB Business Review

Cross-check contact information and call them using a phone number from a public or online directory. Verify that the representative who called is affiliated with the agency.

Be wary if the debt cannot be verified or if no documentation is received. Advise them to stop contacting you and register with the National Do Not Call Registry.

Don't ignore debt collectors, even if you do not owe the funds. It is best to respond immediately, even if you don't believe the debt is yours. Otherwise, the collector may continue contacting you or file a judgment.

Don't pay. Do not claim a debt that isn't yours or make a payment on a bill just to make the collector "go away." Even just one payment can indicate that you are accepting the full responsibility of the debt. The invalid debt could also reflect as a liability on your credit report.

If no debt is confirmed, contact any involved parties to clear up inaccuracies on your credit report, such as: the debt collector; the creditor or company claiming unresolved accounts; and the major credit bureaus. Write a detailed letter and include supporting documents to prove your case. The Federal Trade Commission provides additional resources for reporting errors.

Later this week, we'll talk about best practices for responding to legitimate debt collectors.

1 comment:

  1. One of the clues that it's a scam is when If the caller continues to call you, numerous times a day, regarding a payday loan you never obtained or unaware of.