Protect Yourself From This Phantom Debt Collection Scam

Photo (cc) by photoloni

Scammers trying to coerce people into paying phantom debts are expanding their intimidation techniques by calling and harassing victims’ friends and family.

According to the National Consumer League’s Fraud.org, callers impersonating debt collectors are hoping that social pressure or the fear of losing a job will push victims to fork over the money to pay off the fictitious debt.

So how do scammers obtain people’s personal information, including the names of loved ones and employers? Surprisingly, it’s actually coming from the victims – unbeknownst to them, of course. Fraud.org said:

Scammers may be acquiring contact information for a victim’s employer or family members through bogus online payday loan applications. Information about consumers who have previously been defrauded [is] also sold and traded among scammers. These so-called “sucker lists” can contain information such as a consumer’s home and work address, phone number, occupation, and information about how much money a consumer has spent on previous fake offers.

Debt collectors calling family members and friends is a red flag that something fishy is going on. “Under the federal Fair Debt Collections Practices Act, it’s illegal for debt collectors to discuss a debt with anyone but the debtor without permission, but since scam artists are generally trying to collect debt that doesn’t exist or is owed to someone else, they don’t really give a hoot about following the letter of the law,” Consumerist said.

Victims of these debt collection scams are being cheated out of much more than pocket change, Fraud.org said. Between October 2013 and June 2014, victims lost an average of $1,748.

These tips from Fraud.org will help you protect yourself from becoming the next victim of a debt collection scam:

  • Personal info. You should be wary of sharing your personal information, like banking information or credit or debit card numbers, on the phone. If a “debt collector” asks for this information, it’s likely a scam.
  • Payday loans. Be careful when you apply for payday loans online because they could be bogus sites. You risk exposing sensitive information about yourself that can be used by criminals.
  • Proof of debt. Ask for written proof of the debt you owe, which is an especially good idea if you’re unsure that you owe anything.
  • Check it out. If you’re not sure you’re talking to a legitimate debt collector, hang up the phone. Then look through your loan paperwork and call the appropriate lender directly.
  • Identity theft. If you are contacted by a scammer, there’s a good chance your personal information has already been compromised. Check out the Federal Trade Commission’s step-by-step process for recovering from identity theft here.

Have you or someone you know been a victim of a debt collection scam? Share your comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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