myFICO: Little clues that show you that a debt collector is a fake

SAN JOSE, Calif.–(BUSINESS WIRE)–Having old debts hanging over your head can be scary. Scammers may try to play on this fear by impersonating a debt collector suing you for overdue bills.

Recognizing a scammer posing as a collection agency can be a little more difficult now that collection agencies can contact consumers through social media, text messages, and email. Here are some signs to look for that can help you avoid becoming a victim of myFICO.

For more information on loans and credit, visit the myFICO blog at https://www.myfico.com/credit-education/blog

They will not give you their contact details.

Always ask for details to verify the identity of a company that contacts you for money or information. A legitimate collection agency will have no problem giving you their company’s name, address, or website. Scammers try to bypass details and provide you with as little information as possible. Beware of a company that won’t give you basic information about its business.

The company does not appear in an Internet search.

It’s a major red flag if you can’t find any official information about a company online. Most legitimate businesses will have at minimum a corporate website and a Better Business Bureau profile. If the business shows up in an internet search, check that the business name, phone number, address, and website all line up.

Checking business information online is a start, but it’s not enough. A scammer can fake their caller ID and impersonate a real business, so doing a little more due diligence will give you added assurance.

Your state regulators cannot verify the company.

Most states require collection agencies to be registered and have valid insurance to collect from residents of that state. Check with the Secretary of State and your state’s Department of Insurance to see if a debt collector even meets the requirements to do business where you live.

They push you to make payments that are hard to trace or don’t offer consumer protection.

One of the best ways to recognize a fake debt collector – or any scammer – is to know how they want you to pay. Legit businesses accept standard payment methods: credit cards, debit cards, or check/ACH. Many also offer the option of sending your payment by post or paying online.

Not wanting to be tracked, scammers usually demand to be paid immediately by prepaid card, cashier’s check, wire transfer or cryptocurrency. Not only is it impossible to trace the payment back to them, but you also lose some of your legal protections, such as the ability to dispute a transaction.

Threats to have you arrested, your wages seized, or your property taken if you don’t pay immediately are signs that the debt collector really is a scammer.

They pressure you to pay or give personal or financial information.

Scammers aren’t always after the money, at least not directly. Sometimes they are looking for information that they can use to commit identity theft or fraud. Thus, they trick or intimidate people into divulging sensitive information like your partial or full social security number or credit card security code.

The reason they are asking for information may seem convincing, but remember that you haven’t confirmed that they are not scamming you.

The original creditor has a different story.

Once a debt has been sold or assigned to a collection agency, the original creditor or lender often cannot give you much information or accept payment. However, they may be able to give you the name and phone number of the collection agency that took over the debt or if the debt was sent to a collection agency.

Report scams

If you believe you have been targeted by a bogus collection agency, file a complaint with the Federal Trade Commission and your state attorney general. With enough evidence, the FTC can take legal action against the scammers and try to recover the money that was part of the scam.

Dealing with legitimate collection agencies

Confirming if a debt collector is a scammer is only the first step. You also have the right to know if the debt is real and if you are obligated to pay the collector. Write a letter to the collection agency requesting validation of the debt. They are required to return proof or stop all collection activity, which includes reporting the debt to a credit bureau.

About myFICO

myFICO makes it easy to understand your credit with FICO® Scores, credit reports and alerts from all 3 bureaus. myFICO is the consumer division of FICO – get your FICO scores from the people who do FICO scores. For more information, visit https://www.myfico.com/

Comments are closed.