Consumers who owe money or are behind on bills may be legitimately contacted to pay off debts. Debt collectors seek to reclaim funds on past-due accounts on behalf of creditors, businesses or individuals. However, phony debt collectors are lurking.
Sometimes the "debt collector" calling turns out to be an identity thief who is trying to get you to divulge personal or financial information, such as Social Security, bank and credit card numbers.
Problems Reported: Better Business Bureau warns of debt collector issues:
- Scammers impersonating legitimate debt collectors to illegitimately obtain financial information.
- Repeated debt collection contacts when no debt is owed or regarding another person's debt.
- Harassing or threatening debt collection practices when debt is owed.
Red Flags: Be wary of debt collectors that:
- Won't reveal the name of the agency or creditor they are calling on behalf of.
- Refuse to provide documentation of debt.
- Only accept payments in cash or via money transfer.
- Demand payment in a threatening or aggressive manner.
BBB Tips: Verify debt.
- Request written proof. 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.
- Verify that legitimacy. 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 Reliability Report at www.bbb.org. 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
- Do not provide personal or financial information unless the validity of the debt and the debt collector has been confirmed.< li>
- Avoid phony calls. 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 at www.DoNotCall.gov or 888-382-1222.
BBB Tips: Debt you don't owe:
- Don't ignore the collector. 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.
- Contest errors. 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.
- Check for identity theft. If contacted by a collection agency regarding erroneous bills or debts, it could be an indication of identity theft; an imposter may be using your identity to make purchases, open accounts and obtain credit. Review your credit report to quickly identify fraudulent activity or make corrections; visit www.annualcreditreport.com for a free yearly credit report and get FTC advice for Resolving Specific Identity Theft Problems relating to debt collectors.
Debt you do owe:
- Know your responsibilities. It is not against the law for a debt collector or creditor to contact you regarding unpaid debts. Try working with them to resolve issues. Discuss doing payment plan and request obligations in writing. Get more Debt Collection FAQs from the FTC.
- Complain about abusive practices. Report harassment, threats and other violations of federal telemarketing laws to the FTC. File a BBB complaint if you believe a debt collector is acting unethically. Also, research state laws on debt collectors, which may vary.
- Stop collector calls. According to federal law, a debt collector cannot continue to contact you—at work or home—if you tell them to stop. Write a letter stating not to contact you anymore. Save a copy of the letter then send the original via certified mail and request a return receipt. If a debt is owed, the collector or creditor can still take legal action to collect funds and may contact you to inform you of their action.
- Seek help for debt. Try using BBB's free online program Managing Credit – Made Simpler.
Know your rights. Review the federal Fair Debt Collection Practices Act (FDCPA), which sets standards for collection agencies and prohibits abusive tactics. The FDCPA is enforced by the FTC and violations should be reported. Debt collectors:
- May not make false or deceptive claims.
- Are not allowed to make idle threats, express or implied, or use abusive or profane language.
- Should not discuss consumers' accounts with unauthorized third parties.
- May not inaccurately report credit information and pressure consumers to pay debts they do not owe.
- Must investigate the validity of a dispute over a debt.
Report Scams: Debt collection victims can file complaints with the:
- Federal Trade Commission.
- Internet Crime Complaint Center, if contacted by internet or e-mail.
- State Attorney General's Office and other local consumer affairs agencies: Oregon Division of Finance and Corporate Securities.
- American Collectors Association (ACA International) processes complaints on its member debt collectors; find out if the debt collection agency is a member.
- Better Business Bureau or contact BBB.
Additional Tips, Articles and Resources:
FTC: Fair Debt Collection Practices Act Links
FTC: Money Matters – Debt Collection
BBB: Five Steps to Take When a Collector Comes Calling For a Debt You Don't Owe
BBB: Widespread Harassment From Phony Debt Collectors Raises Concerns of Mass Data BreachBBB: What Are Fair Debt Collection Practices?
Oregon Statues and Rules on Debt Collection Agencies