Payday loan telephone collections could strike it rich: What to watch for

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;
  • File a complaint at

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