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Debt Collector Scams: How To Spot and Avoid Them

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In a Nutshell

If someone calls you about a debt and doesn’t identify themselves, asks for payment via wire transfer, demands personal information, or calls at odd hours, these are red flags that indicate the caller is a scammer. You can protect yourself by keeping a record of all communication, reporting them, and notifying your real creditor.

Written by Attorney Serena SiewLegally reviewed by Attorney Paige Hooper
Updated August 17, 2023

How To Spot a Debt Collection Scam 

It can be tough to tell the difference between a legitimate collection agency contacting you to collect on a valid debt and a scammer or fake debt collector trying to shake you down for money. 

Here are some of the red flags that should put you on alert for scammers.

Debt Collector Red Flag #1: They Don’t Identify Themselves 

The first thing you can do to determine if the debt collection company contacting you is legitimate is request information about the caller. If the person calling you isn’t forthcoming about who they are and who they work for, press on and ask for

  • Their name and employee number (if applicable)

  • Their employer’s or supervisor’s name 

  • The company’s name, physical street address, and website (though not all companies will have a website)

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

A legitimate collection agent should be able to provide you with enough identifying information to prove they aren’t scammers.

Debt Collector Red Flag #2: You’re Contacted About a Debt, but You Haven’t Received Prior Notice by Mail

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 either before or within five days after the first call. 

According to the Consumer Financial Protection Bureau (CFPB), the validation letter should include:

  • A statement that the letter is from a debt collector

  • Your name and mailing address and the debt collector’s name and mailing address

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

  • Any associated account number(s)

  • An itemized list of the debt amount that includes interest, fees, payments, and credits

  • The amount of the debt at the time the notice was sent

  • Information about how to reply to the debt collector

  • Information about when the 30-day dispute timeline ends

The validation letter must also include a tear-off form that you can return to the debt collector if you dispute the debt or need more information. 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. Even if a collector sends this letter upon request and the information in it matches what you heard on the phone, it’s still wise to proceed with caution. 

Verify the debt against the debts in your credit report. (You can get your report for free each year.) Your credit report should also list who the lender or creditor is, the debt balance, your payment history, and any information the creditor has reported about delinquency or default.

Debt Collector Red Flag #3: The Caller Asks for Immediate 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 

  • 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.

Debt Collector Red Flag #4: The Caller Threatens To Reveal Your Debt to Others

The Fair Debt Collection Practices Act (FDCPA) is a federal law that prohibits creditors and debt collectors from threatening to tell others — including family members, co-workers, employers, or friends — about the debt they claim you owe. They also can’t threaten to report you to the IRS or law enforcement

It’s against the law for debt collectors to bully you or harass you through guilt or shame. If this happens, it’s also a sign of fraud.

Debt Collector Red Flag #5: You Get the Call Before or After Business Hours or Get Repeated Calls

Fake debt collection agencies are more likely to call at odd hours like early in the morning or late at night. But real debt collectors are only allowed to call you at reasonable hours, per the FDCPA. 

Under the FDCPA, debt collectors can’t call so frequently that it is harassing, annoying, or abusive. 

They can’t disclose information about your debt to your employer or family members. Finally, if you tell collectors to stop calling you at work or that your employer does not allow calls, they must stop.

Debt Collector Red Flag #6: The Caller Asks for Personal Information

Real debt collectors will already have your primary personal and financial information. You shouldn’t have to provide it. At a minimum, they should know, and be able to show you in writing:

  • When and where your debt originated

  • How they got your account from the original creditor

  • How they calculated your current balance

Although professional scammers have ways of getting some information about you, they won’t have all the details a real debt collector would have. 

Debt Collector Red Flag #7: The Caller Demands Sensitive Information

Always protect sensitive personal information. You should never need to disclose your Social Security number, bank account number(s), or credit or debit card number(s) to a debt collector over the phone. Revealing this information puts you at greater risk of identity fraud and could allow scammers to access your bank account. 

Debt Collector Red Flag #8: The Caller Threatens Arrest

It’s common for fake debt collectors to threaten arrest in some way. This is illegal. They can’t threaten to report you to the police, 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 Can You Tell a Legitimate Debt Collection Call From a Fake One?

The best thing you can do to protect yourself is know the red flags that indicate a scam. It also helps to stay calm and know your rights. You have the right to ask anyone who contacts you about a debt to validate the debt before you continue speaking with them about debt collection.

Legitimate debt collectors may call you, but, by law, they must send a written validation notice within five days of first contacting you. Review this and other protections in the Fair Debt Collection Practices Act (FDCPA). This is the federal law that protects you from being harassed by debt collectors. It also prohibits them from lying about the amount of money you owe or threatening harm.

What Should You Do if You Think You’re Being Scammed by a Fake Debt Collector?

It can be intimidating in the moment but if you believe you are being contacted by a scammer, take action to protect yourself. Ask for their information right away, keep records of all communication, and report violations.

Here’s more information on each of these points.

Ask for the Caller’s Contact Information

A legitimate debt collection agency won’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. If they don’t give you a direct answer, that’s a huge clue you’re being scammed. 

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.

Keep a Record of All Communication 

If you are receiving scam calls, make sure you keep record of all interactions — especially if it’s a repeat issue. You can do this by recording (or taking notes) of every phone call, saving any text messages or emails, and saving any letters or mail you receive from a suspected scammer. 

Report the Scammer 

If you believe you are being scammed, you can file a complaint with:

If you want extra protection or debt relief options, don’t be afraid to seek legal advice.

Inform the Creditor

If you think a scam collector is posing as a legitimate lender, contact the original creditor. If the original creditor sold your debt to a collection agency, they will be able to tell you the name and contact information of the new collection agency. Get as much information as possible. The more you know, the stronger your potential dispute against fraudulent creditors will be. 

What if I Have Legitimate Debt? How Can I Protect Myself From Scammers? 

If you have legitimate debt, eliminating that debt can be a great way to protect yourself from scammers.

If you no longer have debt, you’ll be able to determine if someone is scamming you right away since there would be no reason for a real debt collector to contact you. If you have tried to get rid of your debt before, without success, consider filing bankruptcy

Upsolve has helped thousands of people file Chapter 7 bankruptcy for free. If you think this might be the right path for you, take our free screener right now to see if you’re eligible. 

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

Attorney Paige Hooper


Paige Hooper is a seasoned consumer bankruptcy attorney with 15 years of experience successfully representing debtors in Chapter 7, Chapter 11 and Chapter 13 cases. Paige began practicing bankruptcy law in 2006 and started her own solo, multi-state bankruptcy practice in 2012. Gi... read more about Attorney Paige Hooper

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