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.

Read Next
It’s Worth Paying Extra for These 14 Items
It’s Worth Paying Extra for These 14 Items

Here’s where to find the sweet spot at the intersection of price and quality.

5 Memberships That Offer Car Insurance Discounts
5 Memberships That Offer Car Insurance Discounts

These discounts may save you hundreds — even thousands — of dollars a year.

New Ways to Save Money on Insurance of Every Kind
New Ways to Save Money on Insurance of Every Kind

Tech startups are making it easy to find the best rates for all kinds of insurance policies — and get covered fast.

Not Asking About This in the Hospital Can Cost You Thousands
Not Asking About This in the Hospital Can Cost You Thousands

Medicare recipients who fail to clarify their hospital status can pay a high price.

7 Effortless Ways to Make Extra Money
7 Effortless Ways to Make Extra Money

In the digital age, new ways of earning cash crop up all the time — and some require next to no effort on your part.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Whether you resell it for a big profit or add it to your own wardrobe, this type of clothing is a hidden steal.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

Is This Treatable Condition Causing Your High Blood Pressure?
Is This Treatable Condition Causing Your High Blood Pressure?

Researchers say too many doctors are overlooking this potential source of hypertension.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

Taking a Multivitamin? Here’s Why You Should Reconsider
Taking a Multivitamin? Here’s Why You Should Reconsider

A new study has bad news for the millions of Americans who spend money on multivitamins.

21 Items to Cut From Your Budget That You Won’t Even Miss
21 Items to Cut From Your Budget That You Won’t Even Miss

Start off the new year by implementing these small-but-smart savings strategies. They’ll soon add up.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

9 Small Expenses That Are Bleeding Your Budget Dry
9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

Prepare to Pay More for These 31 Drugs in 2021
Prepare to Pay More for These 31 Drugs in 2021

More than 700 prescription medications have seen price hikes so far this year. Here’s a look at the worst.

5 States Lowering Taxes This Year — and 2 Raising Them
5 States Lowering Taxes This Year — and 2 Raising Them

State personal income tax rates, brackets and deductions just changed in these places.

11 Huge Retirement Costs That Are Often Overlooked
11 Huge Retirement Costs That Are Often Overlooked

Does your retirement budget account for all of these costs?

7 Tricks to Cleaning Your Bathroom Faster
7 Tricks to Cleaning Your Bathroom Faster

These tips can get your bathroom sparkling with little time and no elbow grease.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.