Beware of Scam Debt Collectors

The Federal Trade Commission (FTC) recently shutdown two scam companies using call centers in India to bilk intimidated consumers out of more than $5 million.

These scammers posed as debt collectors and made over 8 million phone calls to unsuspecting consumers. In large part, they targeted “debtors,” who didn’t even owe any debt. According to the FTC, the scam collection calls focused on alleged payday loans, short-term loans, and other high-interest loans. In many cases, the victims had never taken out any “loan.” They had, however, filled out an online application, disclosing personal financial information, such as a bank account or a social security number. The scammers used that information as hook. Then, in conjunction with threats of lawsuits, arrest, or other abusive tactics, they succeeded in extorting money from victims.

Now, if you are thinking, “Why would a person make a payment on a loan they never received,” victims reported being so unnerved by the threatening calls at odd hours or in the workplace that they felt forced to pay to get the calls to stop.

In addition, the FTC reported that payday loan applicants are often so “overwhelmed” with financial problems they are an easy target. Low income and financially-strapped individuals can become confused by misleading information or scared into paying.

FTC staff attorney Elizabeth Scott stated, “It’s very frightening. They threaten to show up at your home or workplace and arrest you. And they have so much personal information on you — your bank accounts, etc. — that they’re believable.”

Don’t become a victim yourself! Beware!

Don’t pay on a loan or debt, unless you are certain that it is yours. Never pay without first seeing documents; and never pay by telephone! If you dispute an alleged debt, say so! And don’t make any payments!
Always request verification documentation that a claimed “debt” is legitimate and that the amount sought is accurate!

Know for certain that a collector is not legitimate if they –

• Won’t give you their complete contact information, including address and telephone number
• Won’t make arrangements for a proper payment plan
• Use threats or other abusive tactics in an attempt to collect
• Seek more of your personal information than they already have

If you feel that you are being scammed or if you feel threatened or treated unfairly, contact a consumer rights attorney right away. Your have rights, and there are laws, such as the FDCPA, designed to protect those rights.

2 Responses to “Beware of Scam Debt Collectors”

  1. Karen Says:

    Dear Mr. Fine,

    WOW…After reading this article, it’s unbelievable. I am so glad I made this phone call to you. This is so disturbing to even know that this is happening to people…(including myself). Every threat that has been stated in this article was made to me. They cannot continue to keep getting away with this. Thank you for sharing!

  2. Linda Reaser Says:

    Thanks Michael, This publication is great,this to is happening to me and my Daughter,people need to know they have rights. Thanks so much for helping us.!!

Leave a Reply

This entry was posted on Wednesday, June 20th, 2012 at 2:27 pm and is filed under Articles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.