Better Business Bureau Reports a Sharp Increase In Debt Collection Scams

CHICAGO, IL – According to the BBB records, fake debt collection scams are on the rise. From September 2011-2012, there were 782 complaints. From September 2012-2013, there were 926, an 84% increase from the previous year.

These types of scams can vary. In some instances consumers are receiving calls stating that they need to pay money for a loan that they may have never had or to pay a higher amount for a loan that they do have.

It can be difficult to distinguish a legitimate debt collector versus a scammer. However, there are a few red flags consumers should look for.

• Calls seeking payment on a debt for a loan you don’t recognize.
• Refusal by the caller to give you their own contact information.
• Persistent request for personal financial or sensitive information.
• High pressure tactics designed to scare you, by saying that you could get into legal trouble by not paying immediately.

“If people call pretending to be debt collectors, consumers can be at high risk of identity theft,” said Steve J. Bernas, president & CEO of the Better Business Bureau serving Chicago and Northern Illinois. “Consumers have to be cautious with these callers and must never give out personal information with people they do not know.”

The BBB offers the following tips when dealing with a fake debt collector:

• Ask the caller for contact information. Ask for their name, name of company, street address and telephone number. Tell the caller that you refuse to discuss debt until you receive a written “validation notice,” which is a written notice of the amount of debt and your rights under the Fair Debt Collection Practices Act.

• Stop speaking with the caller. If you have the caller’s address, send a letter demanding him or her to stop contacting you. According to the Fair Debt Collection Practices Act, if debt collectors receive this letter in writing, they must stop calling you.

• Don’t give personal information. If you don’t know exactly who you’re dealing with, never confirm sensitive information such as your bank account, credit card or Social Security numbers. Scammers use this information to commit identity theft.

• Contact your creditor. If you actually are in debt but you think the debt collector calling isn’t legitimate, contact your creditor, using contact information from your personal online account. Your creditor is able to find out who the suspicious caller is and if they are authorized to collect a debt from you.

• Report the call. Don’t hesitate to call the Better Business Bureau, FTC, or your state Attorney General’s office. Illinois has its own debt collection laws, and these offices are able to help you determine your rights under your state’s laws.

For more tips and information about scams, visit www.bbb.org