Don’t Get Scammed

In talking with potential clients, I have noticed an increasing problem in the debt collection industry – SCAMS. It seems more and more that innocent consumers are receiving some of the most horrific telephone calls from people allegedly attempting to collect old debts. Don’t be fooled; there are legitimate collection agencies that conduct legitimate business (although these companies may violate the federal collection laws for harassing conduct), and then there are “scams”, people who have no relationship with the creditor they claim to be collecting for. Yes, these people are trying to commit fraud, they are trying to scam you out of money and you should not pay them ANYTHING. Below are a few tips to separate the actual collection agencies from the scams. Payday Loans:rnThe vast majority of these scams involve payday loans. For whatever reason, when consumers apply for payday loans, the information they provide does not stay with the lender only. Unfortunately, these “scammers” find out that consumers applied for payday loan, and use that to pick their victims. I have spoken with individuals who were not even approved for the loan (information that the “scammers” did not know, but do not care). This is not to say that all collectors calling on payday loans are scams, but it is something to keep in mind. Also, this is why the calls mostly come to the consumer’s place of employment – because that is on the application. Fake Company Name:rnLegitimate collection agencies have no problem informing you who they are. Those companies have been hired to the creditor and want to let consumers know who they are so they can collect for the creditor to keep the creditor as a client. When called in one of these scams, however, there is often a refusal of the scammers to provide a name. The primary reason; there is no name (remember, these people do not work for an actual company). However, the scammers sometimes provide fake names to try and appear legitimate. When this occurs, the name is typically an acronym, but the scammer refuses to ell consumers what it stands for. Other times, the fake company name includes legal terms thrown together in an attempt to scare consumers into believing (1) that the company is legitimate and (2) that the consumer will suffer serious legal consequences unless they pay. I have heard fake names such as “Affidavit Consolidated Services” (FYI – these words do not make any sense used together). Other fake names often use the word “legal”. Again, they do this to try and sound more legitimate and to make consumers believe they may suffer serious legal repercussions. “I am Investigator Common Name”:rnWhile it is no secret that collectors in the collection industry use aliases, with scammers, the “aliases” used are extremely common. Also, the often scammers claim to be more than just John Smith or Joe Brown; they are “Investigator Smith” and “Investigator Brown”. This is just another trick the scammers use to try and sound important and legitimate. Threats of Arrest or Criminal Charges:rnJust know that consumers cannot be arrested because they fell behind in debt. It is not a crime. No Address:rnThese scammers do not wake up in the morning, put on a suit, go to an office, take an hour lunch, then go home at the end of the day. There is no building with the company’s name on the door (remember, there really is no company name). IF an address is provided, it is often a P.O. Box. In researching some addresses provided, I have found some that are a UPS store. A little rule of thumb: if they cannot be physically located, they do not want to be for a reason. Legitimate collection agencies have no problem informing you where they are located. Cash Equivalent Payments:rnAnother characteristic is the manner in which payment is requested. As stated above, the scammers to not want to be found, so they do not want payment that can be traced. The most common forms are money orders (mailed to a PO Box – this is like sending cash), pre-paid check cards, bank account info, etc. What you will NOT see is an agreement to any form of repeated payments. The scammers do not want to establish any type of relationship with their victims; they want to get some form of immediate payment and move on. Again, these are some tips that you can use to help separate a legitimate collection call from a scam, but just because one or two characteristics are observed does not automatically mean somebody is trying to scam you. You can always call the creditor to see if the account has been sent to collections and if so, which collection agency. Also, you can also do some independent research on these companies; if most of the blogs identify the call as a scam, it could be. If the research leads you to believe the call is from a legitimate company (particularly a company that is approved by ACA International), then it likely is. Just be smart, and you won’t get scammed.