How Can I Avoid Debt Collection Schemes?

Posted on May 18, 2015 at 12:00pm by

For many with past due debt, constant phone calls from collection agencies have become a familiar fixture in life. However, some of the people calling every hour may not be real debt collectors.

In some cases, scammers will contact people and claim they are working on behalf of a collection agency to collect a debt, but in reality, they are thieves looking for an easy score.

Several fake collection agencies have been targeted by the Consumer Financial Protection Bureau (CFPB) for contacting and lying to people about supposed debts. The fake collection agencies would have operators threaten people with jail time and recite bank account numbers to coerce payments for the non-existent debts.

Fake collection agencies would also threaten victims with wage garnishments, suspended drivers’ licenses and lawsuits. Many victims of the fraud paid debts out of fear, without knowing what rights they have as consumers.

What Rights Do Debtors Have Against Collection Agencies?

Under the Fair Debt Collection Practices Act (FDCPA), debt collectors are prohibited from:

  • Threatening arrest
  • Threatening violence
  • Making false statements

These are just a few examples of behaviors that can land a collection agency in trouble. Consumers who are threatened by debt collectors can file complaints with the Federal Trade Commission, the Consumer Financial Protection Bureau and the state Attorney General’s office.

In addition to rights under the FDCPA, consumers can protect themselves by never giving out or confirming information such as a bank account, credit card and Social Security numbers. Debt collectors are required by law to send debtors a “validation notice”, which is a notification of who the money is owed to, how much money is owed and individual rights under the FDCPA. Collection agencies are supposed to identify themselves over the phone, so always ask about and review debt collection companies that call.

If everything else has failed, filing for bankruptcy enacts an automatic stay, which prohibits collection agencies from harassing people in debt.

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