SCAM AWARENESS EDUCATION SERIES

Fake Debt Collectors: How to Verify Real vs. Fraudulent Agencies

Receiving a call or letter from a debt collector is stressful. Debt collection scams are on the rise, often using aggressive tactics to scare people into making immediate payments for debts they don’t even owe.

Knowing your rights and how to spot the phonies can save you money and protect your identity. Here is how to verify a real agency versus a fraudulent one.

1. Recognize the Red Flags of a Scam

Legitimate debt collectors must follow the Fair Debt Collection Practices Act (FDCPA). If a caller does any of the following, they are likely a scammer:

Threatens Arrest or Jail Time: In the U.S., you cannot be arrested for failing to pay a consumer debt (like a credit card or medical bill). Only a court can issue a warrant, usually for failing to appear in court, not for the debt itself.
Demands Untraceable Payment: Legitimate agencies accept checks, bank transfers, or credit cards. Scammers almost always demand untraceable methods like gift cards, wire transfers, or cryptocurrency.
Refuses to Give a Physical Address: A real agency will have a physical office and will provide their street address and phone number upon request.
Calls at Odd Hours: By law, collectors cannot call you before 8 a.m. or after 9 p.m. your time unless you have given them permission to do so.
Uses Abusive Language: While collectors can be persistent, they are legally prohibited from using profanity, insults, or harassing your family and employers.

2. Demand a Validation Notice

The single most effective way to verify a debt is to ask for a Validation Notice. Under the FDCPA, a collector must provide this information either during the first call or in writing within five days of contacting you.

A legitimate notice must include:

The exact amount of the debt.
The name of the original creditor.
A statement that you have 30 days to dispute the debt.
Instructions on how to dispute it.

Important Note: If the caller refuses to send this notice or says they “don’t have it,” hang up. A real agency knows this is a legal requirement.

3. Independent Verification Steps

Don’t take the caller’s word for it. Conduct your own investigation before sharing any personal information:

Check Your Credit Report: Use a trusted, official source to see if the debt appears on your credit history. If the debt isn’t there, it doesn’t automatically mean it is fake, but it is a reason to be extra cautious.
Verify the Agency’s License: Many states require debt collection agencies to be licensed. You can verify a company’s credentials through your State Attorney General’s Office or a national financial service provider database.
Contact the Original Creditor: If the caller claims you owe money to a specific bank or hospital, call that institution directly using a number from your own records or their official website. Ask if your account was sold or referred to the specific agency that contacted you.

4. Protect Your Personal Information

Scammers often “phish” for data. Never provide or “confirm” the following over the phone unless you have 100% verified the agency through independent means: