Data collection scams and debt collection scams have risen dramatically in the last few years. Mal-ware at point of sale terminals has been used to steal customer data. Emails that phish for information have been used to steal consumer information and fake debt collectors who threaten victims with lawsuits and arrests have used information gained to exploit consumers.
“Unscrupulous scams hurt consumers and unnecessarily impedes legitimate debt collection efforts,” said ACA International CEO Pat Morris. “The recovery of consumer debt is vitally important to our local, state, and national economies. Those who purposely violate the law to exploit consumers should be held fully accountable for their actions.”
Consumers need to protect personal data and they need to know the difference between a legitimate debt collector and a fake scam being conducted to steal personal information.
ACA International recommends several important items in discerning a legitimate attempt to recover a debt. The first item is that a debt collector may not contact a consumer at times known to be inconvenient. Generally, a legitimate debt collector may not contact a consumer before 8 a.m. or after 9 p.m. in the consumers’ time zone.
Another item is that a debt collector must disclose its identity to the consumer and notify the consumer that the communication is from a debt collector, and (in the initial communication) that any information obtained will be used to effect collection of the debt. Debt collectors are not allowed to make false representations and may not threaten to take action against a consumer if it doesn’t actually intend to seek such action. Consumers also need to be aware that they can dispute the validity of the debt and during the time the debt is being dispute the debt collector must cease collection activity until verification of the debt has been provided. More guidelines can be found at ACA International.
Consumers can protect their personal data by checking credit and debit cards vigilantly and reporting any charges that appear questionable, even small amounts. Consumers can also monitor their credit profiles along with their card activity and consumers need to keep in mind that phishing scams for information don’t just happen via email and the phone. Phishing scams can come through snail mail also. Shred paper with personal information before throwing it away, make online passwords stronger by using a mix of capital and lowercase letters, symbols and numbers, and take great care when giving out credit or debit card numbers, Social Security numbers or other personal information online and offline.
The Consumer Financial Protection Bureau (CFPB) has put debt collection companies on notice against harmful debt collection practices. CFPB has also released new tools to help consumers communicate with debt collectors and resolve collection complaints.
CFPB explains that most collection firms treat consumers fairly, but the ones that don’t “can cause financial harm to consumers and undermine the financial marketplace.” The bureau is in the business of protecting consumers. It warns debt collectors that “any entity that is subject to the Consumer Financial Protection Act of 2010 is legally required to refrain from committing unfair, deceptive, or abusive acts or practices that would violate the Act.”
A recent press release issued by the FBI warns us of a “payday loan” collection scam that is gaining in popularity.
Here’s how the scam works:
You are contacted by telephone by someone claiming to be collecting on a payday loan or even from what may sound like a legitimate company, or agency, even the non-existent “Federal Legislative Department.”
The callers will continually call you demanding payment. They call your home, cell phone and even place of employment.
The calls become aggressively threatening in nature and even seem to contain private information, that no one really should have access too.
You may even be threatened with arrest, and advised that there are outstanding warrants for your arrest as they try to convince you to pay up on the so called debt and your legal troubles will disappear.
The phone is not the only way that this type of fraud can occur. The FBI also advises of instances where a phony process server appeared at home or work and then tried to obtain payment to make the “summons” disappear.
If you are contacted by someone who is trying to collect on a debt that you do not owe the FBI recommends that you:
Contact your local law enforcement agencies if you feel you are in immediate danger;
Contact your bank(s) and credit card companies;
Contact the three major credit bureaus and request an alert be put on your file;
If you have received a legitimate loan and want to verify that you do not have any outstanding obligation, contact the loan company directly;
The Better Business Bureau has issued this report regarding telephone collection fraud. They also advise that you:
Do not respond to personal information stated during the call including your social security number or place of employment – do not confirm or deny – it just provides them with more opportunities to harass you.
Contact your local law enforcement, especially if you are physically threatened.
If you have any doubt about the validity of the debt request it in writing. Debt collectors are obligated by law to provide you with this information including what is owed and what payments are missing.
Better Business Bureau
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