How to know if a debt collector is a scam

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You receive a call or text from an unknown number. It’s from a company claiming that you owe money for something you’ve never heard of.

While debt collectors are indeed very real, there are scammers who pretend to be them to get money out of you. How can you tell the difference between the real ones and the would-be fraudsters? Here are six ways to recognize a debt collector scam.

6 ways to spot collection scams

Getting a call, email or letter from a company that claims to be a debt collector can be alarming. Here are six telltale signs that you’re dealing with a credit collection services scam:

1. They pressure you

A credit collection scam might use scare tactics and threats. The scammer might also pull the emotional card, making you feel like a bad person. And they might try to create a sense of urgency so you move quickly and do what they want.

“Legitimate debt collectors may sometimes be aggressive, but scammers often use fear to get you to act quickly and not ask any questions,” says Thomas Nitzsche, a financial educator at Money Management International, a nonprofit credit counseling organization. “If they’re threatening you with jail time — or worse — that’s a violation of your rights, and a major red flag.”

2. They won’t give you their contact information

Real debt collectors are from reputable companies with websites and reviews, and you can contact them if necessary. Ask the caller for the debt collector’s address and phone number. If they refuse, that’s a telltale sign that it’s not a legit collection agency.

3. The debt isn’t yours

If the supposed debt collector is trying to strong-arm you into paying a debt you don’t recognize, you might have a scammer on your hands.

Check your credit report for accounts in your name, and to see if it shows which debt collection agencies your defaulted accounts have gone to. You can also reach out to the original lender or creditor to see if your debt has been sold off, and if so, where your debt has been sold to.

4. You didn’t receive a letter in the mail

If a debt has gone to a debt collector, you should receive a formal, written notification in the mail. When you do receive such letters, hold on to them. You can refer to them should a scammer contact you.

5. You’re asked to pay by prepaid card or money transfer

Scammers almost always prefer nonreversible payment — think a prepaid card, money order or money transfer, Nitzsche says. That’s because these forms of payment can’t be traced, and scammers take off with your money with very slim chances of getting caught. Be on the alert if they ask for payment methods that seem out of the norm.

6. They threaten to tell your co-workers, friends and employers about your debt

By law, debt collection agencies typically aren’t allowed to share details about your debt with most people. Should they call your home or workplace, they can only call between 8 a.m. and 9 p.m. in your time zone and ask about your whereabouts. If you tell them not to call you at work anymore, they must stop.

4 ways to protect yourself from debt collection scams

If you’re worried about becoming a victim of debt collector scams, here’s how you can protect yourself, your bank account and your personal information:

1. Contact your creditor

Track the source of the debt by reaching out to your creditor to see if it has any information about the debt in question. If the company that contacted you matches what your creditor has on file, then you’ll know it’s a legit debt collector. Always ask for a validation letter or confirmation about the debt. That way, if you do receive fake debt collection letters, you’ll be able to check them against the legit one from the actual collection agency.

2. Check your credit report

Look at your credit reports to see if the debt the collector is referring to is actually on your report. You can order free credit reports from all three major credit bureaus — Experian, Equifax and TransUnion — at

Note that while most debt is reported, not all debt collectors relay information to the credit bureaus. Yes, it’s confusing. This means that the debt could still be yours but not show up on your credit report.

3. Don’t disclose any financial information

When someone asks for both personal and financial information, don’t share anything the potential scammer doesn’t already know. Instead, turn the tables on them, and ask for the name of the caller, the collection company, contact information such as a phone number or email address and its physical address.

If the collector is willing to provide information, that’s a good sign. Next, try to call the company or send it an email. If you get a dead line or the email bounces back, that’s a red flag.

4. Stay calm and know your rights

Dealing with a debt in collections can be stressful and embarrassing, but don’t be hasty, Nitzsche says.

“A legitimate debt collector should be able to provide you with documentation that shows where the debt came from, when they acquired it and how they arrived at your current balance,” he says. “Always ask for this verification as soon as collection attempts begin.”

Under the Fair Debt Collection Practices Act, a legit collector needs to identify themselves and can’t try to contact you at any unusual time or place.

They also can’t communicate with anyone about your debt except for your attorney, the attorney for your creditor or the collection agency and, in some cases, a consumer reporting agency.

It’s also helpful to know your state’s statute of limitations on debt, Nitzsche says. This can be anywhere from three to 10 years.

“If the debt they claim you owe — legitimate or not — is beyond the statute of limitations, the collector can attempt to collect but cannot sue you,” he says.

How to report fake debt collectors

If you think you’ve been scammed or there’s been an attempt to scam you, there are ways you can fight back.

1. Keep a paper trail

Nitzsche recommends keeping records of all communication with the collectors. Jot down every phone call, save emails and texts and gather letters and any other correspondence you receive from the company. The more information at your disposal, the stronger your complaint will be if you file a report.

2. Reach out to your state’s attorney general

Your attorney general’s office is on the alert for scammers and aims to put a halt to fraud such as debt collector scams.

3. Submit a complaint

You can report a fake debt collection agency to the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB).

With major debt collection rule changes slated for November 30, 2021, one of the biggest changes is that debt collectors will be allowed to contact you through email, text message and social media direct messages, Nitzsche says.

“There’s a really good chance that scams will increase with all of these new methods of communication, so be vigilant and remember your rights,” he says.

Featured image by Drazen Zigic of Shutterstock.

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Written by
Jackie Lam
Contributing writer
Jackie Lam is a contributing writer for Bankrate. Jackie writes about auto loans.
Edited by
Associate loans editor