Scammers impersonate debt collectors to steal your personal information and your money
When it comes to finding victims, the favorite tactic of scammers is impersonation. In this case, debt collection offers criminals a myriad of ways to employ impersonation in the hope of increasing their coffers.
Two of the most popular debt collection scams involve pretending to be estate debt collectors and pretending to be legitimate debt collectors. The former preys on those who’ve recently lost a loved one and the latter preys upon people who are in dire financial distress and may also be victims of identity theft.
Fake Estate Debt Collectors
You’ve heard the term “ambulance chasers,” consider fake estate debt collectors as “obituary chasers.” Scammers will peruse obituary notices and then target the grieving relatives in order to extort money from them. They will often falsely claim that a deceased loved one had owed them a substantial sum of money, then mercilessly pressure those relatives to pay out of pocket, despite the fact that family members are rarely responsible for a deceased person’s personal debts (most outstanding debts are usually paid from the estate itself according to probate court).
These scammers will push family members to pay immediately using untraceable methods of payment such as wire transfers or gift cards. To add urgency to their demands, they will insist that the victim pay this debt with their own personal money. Here’s a major tell: scammers will fail (or outright refuse) to send a formal validation notice with details regarding the original creditor. These fraudsters often operate from a position of anger and threats, particularly when a potential victim asks for their company name, address, and phone number. The calmer scammers tend to simply dodge such questions altogether.
Know the warnings signs
Urgent Demands: They push you to pay right now using untraceable methods like wire transfers or gift cards.
Personal Liability Threats: They claim you must pay the debt using your own personal money.
No Written Proof: They refuse or fail to send a formal validation notice with details about the original creditor.
Secrecy or Defensiveness: They get angry or dodge questions when you ask for their company name, address, and phone number.
Ways to protect yourself
Never Pay Immediately: Do not send money or give out credit card or bank numbers.
Request Written Validation: Ask them to mail you a written notice detailing the debt. Real collectors must comply under the Fair Debt Collection Practices Act.
Understand Estate Rules: Legitimate debts are paid out of the deceased person’s estate assets through probate court, not from a relative’s personal bank account.
Consult an Expert: Talk to a probate lawyer or check the official guidelines at Consumer Financial Protection Bureau before responding to any claims.
Fake Debt Collectors
This particular scam depends on the fraudster’s ability to intimidate, scare and confuse their victims into paying off fictitious debt or simply offering up their personal information. As with the estate collection scam, these criminals will claim that money is owed them and then demand immediate payment, even if the debt itself doesn’t even exist.
Some scammers will refer to completely bogus and non-existent accounts, and other may have located debts that may have been charged off by creditors or simply paid off. They acquire such information through phishing and data-mining. They may also have purchased some random information in the hope that it will be useful to them.
Potential victims at risk of being targeted by debt collection scammers have often had a debt referred to collections at some point and fraudsters are well aware of this and will exploit the situation. Also if an intended victim has taken out any kind of high-risk loan such as short-term loans, payday loans, and loans from non-traditional or online lenders — many of whom may have weak data protections and encryption (these lenders might even have sold your information). Lastly, and this may be obvious, if a victim has experienced identity theft they are definitely at great risk. Lists containing information regarding victims of identity theft routinely circulate on the dark web and among criminal groups.
Understand that legitimate debt collectors must follow protocol under the Fair Debt Collection Practices Act. They are required to clearly identify themselves and the company they represent and they must always provide the name of the original creditor. They must also send you a written notice with details of the debt within five days of their initial contact with you. Finally, they must give you the right to dispute the debt if you believe it’s inaccurate or is not a debt that belongs to you.
It’s fairly easy to suss out the scammers: 1) They demand immediate payment and threaten dire consequences; 2) They ask for specific and rather odd payment methods (like gift cards and wire transfers); 3) They will threaten you with prison time and will often use profanity, something that legitimate debt collectors are prohibited from doing; 4) Scammers will call you (and even send letters), but most use email, texts, and even social media DMs to establish contact with potential victims (do not click on any links); and 5) Here’s the biggest tell of all: they will demand sensitive information from you, but balk at providing information about themselves.
The bottom line: If you are contacted by any debt collector always verify everything, never willingly give anyone your personal information. Any legitimate debt collector will already have that information on file. Know what you owe and understand your rights when it comes to any form of debt collection. If you have any doubts or concerns after being contacted regarding a debt, seek professionals who can advise you.
MORE INFORMATION:
When a loved one dies and debt collectors come calling
When a loved one dies, you may learn about debts they owed before they died. You may not recognize these debts. If you are a surviving spouse or family member, you may even wonder if that debt now belongs to you. This is a very common experience among survivors.
Is it a scam if a debt collector calls me after seeing my relative’s obituary?
Scammers may try to take advantage of the situation after a relative dies. If it’s a legitimate debt collector, they must follow certain rules when they contact someone about a debt.
How do I tell if a debt collector is legitimate or a scam?
A legitimate debt collector can tell you their company name and mailing address, as well as information about the debt they say you owe.
Legitimate debt collectors tell you who they are and the company they work for, and give you details about the debt they say you owe. It could be a scam if they won’t share this information or if they threaten you, or ask for your personal information.
Fake and Abusive Debt Collectors
Have you ever gotten a call about a debt you don’t recognize? Or had a collector harass, threaten, or lie to you? Whether or not you owe a debt, you have rights when it comes to debt collectors. Here’s what you need to know.
