There are a lot of Scam Debt Collectors out there. How do you tell the real ones from the scammers, though? Here’s a quick guide.
Debt collectors can be scary. Really scary. They can call you all the time, send you frightening letters, report your delinquencies on your credit reports, and even take you to court. But there are lots of things they can’t do. They can’t lie to you. They can’t threaten to sue you when they either have no right to sue or intention of suing. They can’t use harassing or offensive language. They can’t tell other people about your financial woes. And here’s one important thing they have to do: within 5 days of first making contact with you, they have to send you a written letter explaining who they are and why they’re pestering you. When it comes to distinguishing scams from real debt collectors, this is the most important provision of the Fair Debt Collection Practices Act (or FDCPA).
Why? Because the scammers never follow this part of the law. Never. Here’s a common scenario: out of the blue, you get a phone call from some stranger saying that you’ve got a big unpaid bill that must be taken care of now. If you don’t pay up, they say, they’ll send the cops, serve papers on you, garnish your paycheck, or put a lien on your property. Scary stuff, right? So you ask what they’re collecting and for some proof, and they verify your name and address, maybe even your social security number or account number. Now you’re even more scared because they seem to know so much about you. If they know that much, they have to be legitimate, right? WRONG.
In today’s world of mass data breaches, Dark Web ID Thieves, and election-warping Russian hackers, getting your personal information is easier than ever. If you’ve ever had an account with any company that’s been hacked, a scammer can buy your personal information off the Dark Web for a few bucks per account. But that doesn’t make them legit. On the contrary, it makes them criminals.
Fortunately, there’s a very simple test to determine whether or not a debt collector is real or scam: do they have a physical address in the United States of America? If so, they’re probably a real debt collector (but who may still be breaking the law). If not, they’re a scam. It is literally that simple.
Let me repeat that: if a debt collector refuses to give you their address, they are a scam. Period.
How do you go about finding their address? Offer to send a money order. Real debt collectors love accepting money orders at their place of business or payment address. Scams don’t have a payment address because they’re afraid of getting shut down by law enforcement. If you offer to send them real money, a real debt collector will gladly tell you where to send it. Scammers, however, will only make excuses like “we can only take a debit card or Western Union,” or “it’s too late, the payment has to be made over the phone.” Legitimate debt collectors don’t do that. Trust me. If a debt collection scam refuses to give you a real address, you know they are fake, and you can tell them that. There’s nothing they can do to you. Furthermore, you should go ahead and report them to the CFPB or your state attorney general’s office. The people in power need to know that this is going on, and they need to hear from you so it is a priority to protect all the consumers out there who are getting scammed.
So please, please, please: if you know anyone who’s dealing with a collection scammer, tell them not to pay them anything. You aren’t getting anything for your money, and you’re just donating to criminals. These scams are pervasive nowadays, and it breaks my heart to hear about how many honest working Americans are getting fooled by these criminals.