Written by Leah Michaelis, Certified Financial Counseling with LSS
As if we do not have enough scams to worry about, the latest and greatest in the collection world are companies trying to collect on debts that people do not owe. At LSS, it is our goal to give you the tools and resources to defend yourselves against scams like this! The way the scam works is generally the consumer will receive a hostile collection call from the (we’ll call them ‘scammer’) followed closely by a legal looking collection letter that threatens legal action if the debt is not paid immediately. The ‘scammer’ will then usually offer to settle for much less than the original debt to make it appear that they are offering a really good deal if the consumer can pay right away. (Wow! Aren’t they so nice?) The catch? You probably don’t even owe this debt.
Not sure if the Debt is yours?
Ok, some of you will know instantly that you do not owe the debt and that this is some sort of hoax. But for those of us who are not the most organized people in the world, it may not be such an outrageous idea that we somehow misplaced a debt along the way. This can make determining if the debt is legitimate a little more difficult so here are a couple flags to watch for:
- Can the collector tell you where the debt originated? If they are vague and/or never truly say who you originally owed, it could be a debt that you do not owe.
- Does the collector have a physical address and can send you something in writing? If you never receive an address to contact the collection company in writing, than there is a good chance you are the target of a scam.
- Is the debt appearing on your credit report? If the debt isn’t reporting on your credit report, it might not be yours. If you haven’t obtained a copy of your credit report lately, you probably should. You can get three free credit reports a year, one from each of the bureaus. The safest and easiest way I can recommend to obtain a copy of your credit report for free is by visiting Annual Credit Report. Click Here. We can also help you understand your report. Give us a call!
It is important to know your rights when dealing with these ‘scammers’ to protect yourself. Under the Fair Debt Collection Practices Act (FDCPA) you should know:
- Within 5 days after the debt collector’s initial contact, they must send you a statement of the total amount owed to the creditor. This letter must also include information on the action you need to take to dispute the debt. (If you do not receive a letter, this could mean you are being scammed).
- If you send a letter within 30 days disputing that you owe the money, the debt collector cannot conduct any other collection efforts toward you until you receive proof of the debt.
- A debt collector cannot collect on a debt that cannot be verified or any that are in dispute. (If the collection company cannot show you written proof of the debt, they legally cannot collect on it).
When speaking with collectors
The number one thing to keep in mind when speaking with these collection company ‘scammers’:
- Never give out any credit card, debit card or bank account numbers to an unfamiliar company over the phone and always ask for proof of the debt in writing. If they are unwilling or unable to produce documentation showing that you truly owe the debt, then you do not have to pay and/or they can’t collect on it. If a company will not leave you alone and also will not provide any information on the debt, please contact you’re state’s Attorney General’s Office immediately.
The best way to keep yourself protected from scams like this one is to educate youself. Listen to the news, research scams and of course, follow our blog. We will continue to post on scams like this as we learn of them. I also recommend setting up an appointment with us. Give us a call at 888-577-2227 or visit our website at ConquerYourDebt.org to get started. We can help you come up with a strategic plan to help you conquer all of your debts and become debt free!