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UPDATE 22/02/2012: News article published by foxchicago mentions a crackdown on the scam, we recommend reading the article by clicking here
The fake debt collector scam (also known as payday loan extortion) is currently exploding in the United States and Canada. The economic crisis put a lot of people in debt and these scam artists are seizing the moment to extort non-existing loans.
So how do you tell the real debt collectors apart from the fake ones?
One thing to keep in mind: You cannot go to jail for not paying a loan, this is not legally possible. Any lawyer worth his salt will confirm this statement.
Here is a list of some signs which most probably mean that the debt collector calling you is fake.
- Conversation starts off with threats of legal action saying you will go to jail
- Calling about a loan you have never taken out (sometimes even if the debt is real the actual debt collector may still be fake)
- Saying that someone else has taken out the loan but you are obligated to pay it
- The Person calling refuses to provide written proof saying he doesn't need to prove anything
- Uses foul language and calls you names like "thief", "liar"
- Threatens to go to your work place and publicly arrest you
- Says you need to contact your attorney right way
Fake debt collectors often have access to your personal information like date of birth and social security number as well as the address. Do not believe them just because they have this information.
By law here are some things that a legitimate debt collector MUST do (as per the official FDCPA act).
- Debt collector must provide the name of the current creditor (the creditor may have changed if your debt was sold to another company)
- Postal address to send correspondence
- Comply if you say you want to dispute this charge in writing. In this case debt collector has to give the address where you send your dispute after which the collection agency must send you proof of the debt by mail
- Depending on the U.S State a debt collector must have a license which he has to provide (check with your attorney general's office if debt collectos in your state are obligated to have one, you can also ask them to run a license check if the debt collector provides one)
Consult this FAQ created by the FTC.
Here is an official FBI page with details about this scam.
Whenever you get a suspicious call (including a debt collector), immediately post the number on whycall.me to see if others are also receiving these calls.
Remember no matter who calls, you cannot be pressured into making these payments right away. Time scarcity is a common tactic. This is when they say they will arrest you in a matter of days if you don't pay off the fake loan.
Even if the debt collector is real they still have to respect the laws, please read this article for more information on real debt collectors and your rights as a consumer.
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