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Debt Collector Scams: How to Avoid Them

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In a Nutshell

Fake debt collectors are good at shaking people down for money. Fear and intimidation are the tools of their trade. By tapping into credit reports, scammers can find your debts and then call pretending to be one of those creditors. This article will help you spot red flags indicating that a collection call isn't from a legitimate agency, giving you tools to fight back and be on the alert for scammers.

Written by Attorney Serena Siew
Updated November 28, 2021

No one welcomes calls from collection agents, but few people know that some of them are actually scammers. It’s tough to tell the difference between a legitimate collection agency calling to collect on a valid debt and a fraudster. Don’t disclose personal information or consent to have your credit card charged over the phone, even if it’s for a debt that sounds familiar, until you’ve read this article. This article will help you spot red flags indicating that a collection call isn't from a legitimate agency, giving you tools to fight back and be on the alert for scammers. 

Red Flags Indicating Debt Collection Scams

Fake debt collectors are good at shaking people down for money. Fear and intimidation are the tools of their trade. By tapping into credit reports, scammers can find your debts and then call pretending to be one of those creditors. It can be difficult to slow down and ask questions when you feel like you're being attacked, but that is exactly what you must do to protect yourself. 

These are some of the red flags that should put you on alert for scammers: 

  • Refusing to identify themselves

  • Failing to provide any formal written notice about the debt in the mail

  • Requesting payment by wire transfer or prepaid card

  • Threatening to reveal your debt to others

  • Calling outside business hours (before 9 a.m. or after 5 p.m.)

  • Requesting information about your debt that they should already know

  • Demanding your sensitive personal information

  • Threatening jail time or legal action

  • Using profanity, aggression, or insults to pressure you

Believe it or not, there’s actually an etiquette to the collections process. The Fair Debt Collection Practices Act (FDCPA) protects consumers from being harassed by debt collectors. It also prohibits them from lying about the amount of money you owe or threatening harm. Debt collectors also cannot charge you interest, late penalties, or extra fees unless that was stated in your original contract or is allowed by state law.

Legitimate debt collectors may call you, but they must send a written validation notice within five days of first contacting you. Learn what to do if you're being harassed by a debt collector and how to protect yourself against scammers by remaining alert to the warning signs detailed below. 


The first thing you should do to determine if the debt collection company contacting you is legitimate is politely, but firmly, request information about the caller. When you ask for the caller’s name and company, their answer shouldn’t be, “Brad from the Internal Revenue Service.” First, it’s against the law to pose as an IRS or government agent. And second, you’ll need more than the caller’s first name. 

Real debt collectors should provide you with identifying information, such as:

  • Their first and last name

  • Their employer’s or supervisor’s first and last name 

  • The company’s physical street address

  • An office phone number you can call with questions (a business line, not a cell number) 

  • A verifiable company website and email address

A legitimate collection agent should be able to provide these to you with no trouble.

No Prior Mail Notifications

If you have a legitimate debt that has been sent to a collection agency, the agency must send a formal written notice to your mailing address within five days of the first call. The validation letter should notify you of:

  • The exact amount you owe

  • The name of the current creditor (if the debt was sold)

  • The name of the original creditor

If you ask for a validation letter during the first call, the creditor should send it immediately. If the creditor can’t provide these details or won’t send this notice, it’s a red flag. If they do send this letter upon request and the information in it matches what you heard on the phone, it’s still wise to proceed with caution. This may still be a scammer pretending to be a legitimate creditor, so you’ll want to make sure there aren’t any other red flags before you pay.

Asking for Payment by Money Transfer or Prepaid Card

There are three ways scammers like to move money from your bank account to theirs:

  • Money transfer through a cash office

  • Wire transfer (for a fee you may be asked to pay) 

  • Prepaid card

These methods are fast, often irreversible, and hard to track. These payment methods are not standard practice in the debt collection industry and should set off alarms.

Threatening to Reveal Your Debt to Others

The FDCPA prohibits creditors and debt collectors from threatening to tell others about the debt they claim you owe. They can’t even threaten to report you to the IRS or law enforcement, much less family members, co-workers, employers, or friends. Aside from straight bullying, psychological harassment through guilt or shame is also a tell-tale sign of fraud.

Calls Before/After Business Hours

Fake debt collection agencies are more likely to call before 9 a.m. or after 5 p.m. But real debt collectors are only allowed to phone you at reasonable hours. They can’t ask your employer or family members where you are or tell them details about your debt. If you tell collectors to stop calling you at work or that your employer does not allow calls, they must stop.

Lack of Information About Borrower

Real debt collectors will already have your primary personal and financial information. You shouldn’t have to provide it. They should be able to prove, through documents:

  • When and where your debt originated

  • How they got your account from the original creditor

  • How they calculated your current balance

Although professional scammers can get some information from your credit report, it may not be complete. If the scammer is still demanding personal and financial information, it’s a bad sign.

Demanding Sensitive Information

Protect sensitive personal information. You don’t know the caller and should not have to disclose your Social Security number, bank account number(s), or credit or debit card number(s). Revealing this information puts you at greater risk of identity fraud and could allow scammers to access your bank account. 

Threatening to Arrest

It’s common for fake debt collectors to threaten arrest in some way. This is illegal. For instance, they can’t threaten to report you to the cops, the IRS, the Department of Motor Vehicles, or your employer. If anyone threatens to put you in jail, take away your driver’s license, or get you fired, hang up and report the caller using the methods below.

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How to Confront Scammers

It’s not always easy to remember this when you’re being threatened, but you do have rights and you can confront scammers. To start, keep records of all communication by:

  • Recording or taking notes of every phone call

  • Saving threatening texts or emails

  • Keeping demand letters from the company

Debt collection agents have limits, too. If you feel hounded, lied to, or treated unfairly, learn how to dispute a debt and stop debt collection companies using Upsolve’s free library.  

Demand Contact Information

Communication is a two-way street. A legitimate debt collection agency shouldn’t demand complete transparency from you and then tense up when you ask for their contact information. Scammers usually try to avoid sharing traceable information about themselves. That’s why you must demand it. 

Get their mailing address, phone number, and email address. Then call them back or send an email a few days later. If you’re met with a dial tone or unreturned message, it’s likely fraud. If you think the debt’s legitimate, find out who the real creditor is.

Inform the Creditor

You’ll want to resolve a debt that you’ve verified is true, but you think a scam collector is posing as a legitimate lender, contact the original creditor. Ask the original creditor if they sold your debt to a collection agency. The seller should know the name and contact information of the new collection agency that owns your debt. Get as much information as possible. The more you know, the stronger your potential dispute against fraudulent creditors will be. 

Check Credit Report

If scammers are looking at your credit report, you should be, too. Every 12 months (and more frequently now as a result of the pandemic), you can ask for a free credit report from the three major credit bureaus - Experiean, Equifax, and TransUnion. Check if you actually have debt on your credit report. Sometimes creditors don’t report debts to the credit bureaus. You’ll also want to check for inconsistencies or any instances of credit card fraud or abuse. Make sure that there are no unauthorized charges on your report and that no creditor has reported a debt twice.

Finally, make sure a debt collector isn’t trying to collect old debt that has passed the statute of limitations. If a debt has passed the statute of limitations or was previously discharged in a Chapter 7 or Chapter 13 bankruptcy, it can no longer be collected on. 

Where to Report Scammers

On November 30, 2021, debt collection rules will change to allow debt collection agencies to contact you in more ways. In addition to phone and email, they’ll also be able to reach you by text or direct message via social media. This expansion of communication will likely also breed more scams so it’s important to report fake debt collectors. You can file a complaint with:

Scammers prey on your fears and insecurities to get away with a crime. If no one reports them, the fraud will continue and hurt more people. If you want extra protection or debt relief options, don’t be afraid to seek legal advice. Once you have an attorney, debt collectors can no longer call you. They must speak to your lawyer.

Let's Summarize…

Be alert for debt collection scams. Fake debt collectors may refuse to give you identifying information but demand it from you. Some may have accessed your credit report and are pretending to be real creditors. Calling you at odd hours, threatening arrest, or posing as a government agent are all red flags. So are demands for wire transfers, money orders, or prepaid cards. Protect sensitive information like your Social Security number and bank account numbers.

Real debt collectors should be able to provide a verification letter within five days of contacting you that explains the amount you owe, the original creditor, and contact information for the current collector, which you can verify by contacting the original creditor. You can also ask for a free credit report to ensure that you actually have a debt with the lender on the phone. Make sure your credit report reflects the information you’ve been given. 

Don’t be afraid to confront scammers and demand information from them. Report scams to the FTC, CFPB, or state attorney general’s office. Now that you know the red flags, you’re in a better position to fight back. Seek legal advice for more protection and to explore possible avenues of debt relief.

Written By:

Attorney Serena Siew


Serena Siew is an attorney with a specialty in immigration defense and legal writing for the general public. She is a member of the State Bar of California and admitted to practice before the California Supreme Court, the U.S. District Court for the Central District Court of Cali... read more about Attorney Serena Siew

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