New York Debt Collection Scams: Creditors and Debtors Beware

There are and will always be debt collection scams. Today, creditors and debtors alike must beware. Daily reporting of stories of countless individuals and business owners victims of scams, losing their savings and businesses to imposters posing as debt collectors.

“Collectors” posing as IRS agents bilking innocent taxpayers our of their savings, Collection vendors  stealing money by collecting monies on behalf of creditors and never paying the creditors.  

Perhaps you too had received the “notification” from the bank or email from a “client” requesting you to click through to verify your account and receive payment for your customer. SCAM and a clear indicator that someone is seeking to access your data. Clients will never seek to make payment in this manner.

Here are some suggestions to insure creditors and debtors can avoid scams:

  1. Verification: You can always contact the creditor to verify that the collection agency or collection attorney is authorized to negotiate and collect monies on the creditor’s behalf.
  2. Payment:  Payment should always be made payable to the creditor not to the agency or attorney. If the agent tells you they cannot accept a check payable to the creditor – be suspicious and stop right there.
  3. Documentation: It’s never too late to request documentation to verify the debt. If the party cannot supply it, be suspect.
  4. Intimidaion: If the party seeking to collect is attempting to do so by threats and intimidation, hang up. A professional debt collector should NEVER threaten you.
  5. Escrow: Monies collected must be deposited and held in an escrow account until disbursed to the creditor. The creditor is entitled to a copy of the payment made thereby verifying all monies collected are being remitted.
  6. Remittance: The agency or attorney should remit every thirty (30) days. If they are unable or unwilling to do so, contact the authorities. There is a problem.
  7. Financially Stable: Creditors should interview their collection attorney or collection agency as you would any strategic partner. Make sure they are credit worthy. After all, they are engaged to collect and remit your money.
  8. Licenses: Make sure the agency or attorney has the required licenses.
  9. ImpulsiveDon’t act impulsively just because someone is pressing you to do so. Take down the information and get back to them when you have done the necessary research and given all the information.

Even the brightest of people are vulnerable to scams. Be suspicious and be careful.

Jocelyn Nager, managing partner of Frank, Frank, Goldstein & Nager, PC, blogs weekly about preventing and collecting bad debt. To subscribe to the blog click here or, to contact Jocelyn or the team about a debt you would like to collect, contact FFGN.