How to Protect Yourself From Debt Collection Scams

Signs reading "scam" to show the startling nature of debt collection scams.Unfortunately, debt collection scams are becoming more commonplace. Any imposter can try to collect a debt that might not be due. Some scammers are even targeting debt collection attorneys. How can you tell if you received a call or letter from a real debt collector?

The New York State Society of Certified Public Accountants (NYSSCPA) recently warned of taxpayers receiving debt collection scam letters from the Internal Revenue Service. All too often these letters claim to be from the so-called “Bureau of Tax Enforcement,” when in fact there is no such agency. Others claim a warrant has been issued to confuse and trick unsuspecting taxpayers into handing over their hard-earned cash, tax return, or even their cryptocurrency.

These kinds of scams come in all shapes and sizes. It can be difficult to tell who is a real debt collector and who is a scammer. The Federal Trade Commission (FTC) issued warnings about fake debt collectors, who try to trick you into paying debts you do not owe. The agency warns these scammers use all kinds of tactics to get you to pay money you don’t owe. These tactics may include harassment and intimidation, lies and even threatening behavior.

How to Identify Scammers

If you receive a call, ask for the caller’s name, company, street address and the Consumer Affairs license number. All debt collectors in New York City must be licensed by the Department of Consumer Affairs.

Do not give any personal or financial information over the phone, such as your bank information or credit card numbers. Debt collectors must stop calling you if you send a written letter. You are entitled to a written notice of your debt within five days them contacting you by phone. You should not pay until you get one.

“Paying a fake debt collector will not always make them go away. They may make up another debt to try to get more money from you,” writes the FTC. The agency regularly takes legal action against those who engage in debt collection scams. These scams can be costly for those impacted, resulting in hundreds or even thousands of dollars in fraudulently generated cash.

How Can You Tell If a Debt Collection Notice Is Real?

For one, you can call the original creditor to validate the debt and also the debt collection agency that represents them. You should share as much information about the calls as possible to find out, if anyone, the creditor has authorized to collect the debt.

If the debtor agrees the debt is valid, they can make a check payable to the creditor or pay the creditor directly. Any reputable agent for a real creditor will always agree a payment can go directly to the creditor. All debt collectors in New York City must have their license number on their correspondence.

You can also report persistent callers, suspicious callers and scammers to the FTC.

To make sure your debt collection needs are handled legitimately by a trustworthy and reputable firm, contact FFGN for a consult.