Believe it or not, there are varying degrees of debt collection scams. And it is because of these differences, my feedback to people who interact on this, and other sites I participate on, can change. I wish things were more cut and dry, but because licensed and bonded debt collectors can say and do the darnedest things, even when they are collecting legitimate debts, there are blurred lines. Add to that the fact that fake debt collectors continue to get better at… faking it, things can become less clear.
What to do, and how to go about doing it, when you suspect you are being called by an outright debt collection rip off artist, can be different than when you are dealing with a debt collector crossing the line with their unprofessional actions. I am going to focus on the fakers first.
When fake debt collectors call you.
There has been a rash of fake debt collection scams of late. Ten years ago it was not something I would run into. Nowadays, between my site, and many others that are part of my daily activity and news feed, I see a reference to some fake debt collector on a near daily basis. And some of what I see shows that the scam is getting more sophisticated.
Here are some things to look out for from a debt collection scam phone call.
- The debt collector opens the call with an immediate sense of urgency statement. This would mean saying something with an or else that packs a punch, like; you are going to be sued later today if we cannot get a payment set up right now; there is someone coming to your work to serve you a lawsuit.
Legitimate debt collectors and process servers do not make these threats. They just show up. The fact is, virtually any debt collection lawsuit that someone took the trouble to file, is going to serve you with it before talking word one about payments. That is just how that kind of escalated collection action works. There is such a low probability that a legitimate debt collector will both threaten you with an “or else” set to happen same day (or close to it), while simultaneously suggesting your payment will put a stop to it, that the chance of this being a fake debt collection scam are high.
- A debt collector mentions anything about your arrest.
There are very limited instances where you could be arrested for not paying an unpaid bill. Court fines and fees reach to that level, and so can unpaid child support, but unpaid credit cards and other types of debt do not. An exception could be if you were sued, and there is a legitimate judgment entered in the court. If there was an order from a judge that you did not follow, like appear for an asset discovery hearing, it is possible to have a bench warrant out there. But that would be for failure to comply with the courts order, not for lack of payment on a civil judgment. And debt collectors do not call you up to inform you of that in my experience.
- The debt collector refers to themselves as an investigator, or that they will contact the investigator on your case.
Debt collectors that are trained properly cannot act in a false or misleading manner in an effort to get you to pay. Referring to any investigator is awfully close to suggesting there is law enforcement involved in collecting the debt. This is an intimidation tactic. These kinds of words and phrases are not used by legitimate debt collectors.
- They will not name the collection company they are working for.
Debt collectors are required to inform you of who they work for, and the debt they are contacting you about. Any pause with, or failure to identify themselves clearly and immediately, is a huge red flag.
Debt collection scams are getting sophisticated.
Some debt collection scams are designed for the quick cash. They need to scam as quick as they can using a few phone calls to their mark, or to your family members or work place. How is it that a fake collection scam can get the information they need to really cause you stress and pressure you to pay them something?
- They can learn about you, your family, friends and work place through social networks.
- Scam debt collectors with a higher level of sophistication can potentially purchase data about you directly from the credit reporting bureaus, or through a data aggregator or software company, just like legitimate debt collectors do today.
- A legitimate debt collector may have had your debt at one time. Perhaps they did not know their CMS or data management system was hacked, or files copied and sold to someone with a fake collection scam going.
In fact, the debt a scam collector may say you owe is something that could still show on your credit reports, or that once was on them. That is why you may recall the debt in the first place, and be susceptible to fork over some money to stop a fake lawsuit, arrest, or potential embarrassment.
Websites are now being published by some of the fake debt collection scams. When someone shares the name of the supposed collection scam company, I usually see what I can find online about them. I rarely see any company web presence. But more recently I am seeing some decently designed, but very basic websites with the scam company name, or something close to it as the URL. Legitimate debt collectors in this day and age have larger, more well put together web sites, and a strong web presence in general. Fake collectors websites that I have seen tend to have a home, about, and maybe one or two additional pages. The pages are skinny on any details and have no industry badging that you find on legitimate collection company sites.
When the real thing looks like a fake.
I was not kidding about some of the ways licensed and bonded debt collection agencies can be found to step over clear lines of consumer protection laws. It is not hard to understand why they do it. A real debt collector can have a real hard time getting paid when people are struggling to pay today’s bills, let alone pay for the past.
None of that excuses bad collection behavior, and it sure does not help public perception of debt collectors.
Real debt collectors may make empty threats about you being sued. These threats may not be as direct as the fake debt collectors, but the verbiage and tone that is used can be implied to the point that is what you think you heard an hour later.
Most legitimate debt collectors do not use “or else” type of threats to collect. They can be sued for these types of tactics.
In fact, virtually everything I mention that the fake debt collectors do, a real debt collector can and often will be sued for. The debt collection laws they would be breaking are both state and federal violations. Many consumer law attorneys will take these kinds of collection violations on at no charge to you, and instead are paid by the other side. This means all of their fees are covered. You could see some money back for your trouble too.
It is imperative for everyone who is harassed or abused by a debt collector to take action. You should connect with an experienced collections violation consumer law attorney. Post about your situation in the comments below and I can provide feedback and contact details to someone who can help you.
What to do about the scam debt collector.
You can legitimately owe a debt, but still be scammed, whether by real or fake collectors, so… when in doubt… never pay a debt collector making threats like I outline above. If you even have a whiff of concern the debt is not yours, too old to be collected, or that the collector contacting you is either a fake, or a collector willing to step over the legal lines and violate your rights, you should:
- Take good notes of any conversation.
- Write down names, dates, times.
- Capture the caller ID and/or write down any phone numbers they provided for return calls.
- Keep a copy of any voice mail recordings they left.
- File complaints with your state AG and with the CFPB when you have identified the collection company.
- Speak with an experienced consumer lawyer.
- Do not make, set up, or arrange for payments.
Having said all of that, I should mention again that most debt collectors you encounter are not going to be fake. They are not going to violate your rights. If you have a question about the legitimacy of a debt collector, or their behavior, lets talk about it in the comments below.
I reached out to the above reader offline to encourage getting those payments reversed. Hopefully he will share more about his experiences in the comments below.
Anyone with questions or concerns about dealing with fake or harassing debt collectors is welcome to post in the comments below for feedback.
29 comment(s) for this post:
- TJ:
11 Mar 2015 These people call you claiming to be lawyers or attorneys, or paralegals. If you're versed on even some of collection law you'll know when you're talking to a phony. It's a cheap tactic they used on me. A real law firm will notify you before taking real legal action - they will do it in a way that they can show as evidence in court that they truly did reach out to you. This website will help you get up to speed on what you need to know. Best of luck guys. - Derek:
12 Mar 2015 Michael, I just received a phone call from someone stating they wanted to serve me a summons (papers). I called back the number and they state it was a Best Buy credit card from 2006 for $1500. I was then married at 19 and we had bought a laptop on the card. Well we divorced a year later and assuming she was going to pay this was wrong! This company states that I can either make a settlement with them (and pay that settlement in full today) or go to court and potential owe $4900. He said if I don't show up in court .. whenever that is set up and I don't show up I will be considered "failure to a default judgment". They threatened to put a lean on my vehicle, and that they can garnish my wages. I am remarried now, we have 2 children we bought a home last April, and right now are at a financial hardship. We just found out we have to completely replace our septic tank $7k, and didn't pay enough in taxes so we owe the IRS $1200. Everything has rolled down hill within the last month and now this. Do you have a suggestion on how I can ask them to settle with making a "reasonable payment" until the 1500 is paid off? - Michael Bovee:
12 Mar 2015 I moved your comment post over to this page about fake collection scams because I suspect that is what is happening here. Read through the full article above, and then post a comment reply with answers to my questions. What is the name of the collection company the debt collector is calling from? What state do you live in? When was the last payment made on this account (call your ex and find out if you do not know, and cannot tell from looking at your credit report)? Debt collectors preparing a legitimate lawsuit just file and serve you and let the chips fall where they may after that. They do not call full of threats and bluster. But lets look closer with the answer you post. - Derek:
12 Mar 2015 Thank you for commenting back! The company is CLG & Associates, ph#9512694001 located in Texas, the last pawnt made was in 2007. - Michael Bovee:
12 Mar 2015 The 4 year SOL to legitimately sue in Texas is expired. CLG and Associates is not an established debt collector based on what I could find. Scam detector is on high alert with this one. I would file the complaint with the CFPB so that they have a record of it. If they call again, and you are up to it, play possum and see if you can get any more info out of them. You may just want to tell them you think they are scammers and you filed a report, and hang up. - Kelly:
19 Mar 2015 I too received calls from K&MF Group, LLC Tel (844) 852-4385 EXT 5598 in October 2014. They called me, my mother and sister in law (no clue how they got their numbers) saying that somebody was en route to serve me court papers at work (although I work from home and they don't have my current address). I was very alarmed by this because it was for an account that was charged off in October 2008 and just weeks away from the SOL. I wasn't sure whether to ignore it since it was about to drop off my credit report or to set up a payment arrangement (I didn't know what could be done against me in the few weeks before the 7 year statute was reached). My mom was freaking out and said I would get fired if they served me at my workplace, while the people at K&M were only giving me until the end of the day to negotiate payments or get served. I felt like my back was against the wall and I didn't have time to do any research on the matter. Part of me felt scammed but they had my credit report and were using it as "proof" that I had funds to pay this debt, so that made them sound legit....or just good at scare tactics. Do I have any recourse if I have already made a few payments to KM due to fear of having my wages garnished? Do I have to continue the payments or can I stop them or have them return those payments? - Michael Bovee:
19 Mar 2015 If it were me, I would immediately stop all payments and file a debt collection complaint with the CFPB here: http://www.consumerfinance.gov/complaint/. Be sure to include all of those same details in your complaint, and as much more as you feel is necessary. Post an update with the outcome. It can take a few weeks. - Derek:
19 Mar 2015 Michael, They just called again and said that the debt is a secured debt since he actually purchased something. He now says the are called Clark and Associates out of California. He said yes the debt is past the statue of limitation but Best Buy will still continue on to sue us if we chose not to pay it. I asked why it has taken 8 years to try to collect the money. He basically said best buy sits on the cases and lets them take up late fees so that the debt is larger and we end up paying more. I told them we were not paying anything and he said they would continue to process this through litagation and we will be called to court over this when best buy sues us. - Michael Bovee:
19 Mar 2015 Thanks for posting the update Derek. Not gonna happen (the lawsuit). Did you file your debt collector complaint? - Yanet:
24 Mar 2015 Hi I live in the state of California and I was recently contacted on a cellphone bill from 2004 or 2005 were they sate that they will be taking me to court to collect the debt. They advise that they will be going after my bank acc. Mortgage IRS Ect. The amount I owed was 250.00 dollars and now they want me to pay over 1000.00 I advise I was not working and she stated she will be sending me a summons. What can I do, can they do what they said they were going to do. Thanks in advance - Michael Bovee:
24 Mar 2015 I moved your comment over to this page about scam debt collection calls, as that is what I believe is happening with you. Please read the above article fully, and then post answers to the following: Do you know the name of the debt collector? Do you have a phone number (either one they gave to call them back, or that showed on your caller ID? Did you have an old unpaid cell phone bill? Does it show on your credit report, and if so, who is reporting it? - Derek:
24 Mar 2015 Yes I did! :) the same day they called me back. I told them I was going to file the complaint with CFPB and haven't heard bck since then. - Katie:
25 Mar 2015 Michael, I've read through many of your comments and was hoping you could help me to figure out if SMB and Associates is an accredited debt collector? The man I spoke to was Corbin Romano, he stated he was a supervisor with SMB and Associates and he wanted to give me a good deal to resolve my debt with US Bank. While I know I have the debt, my instincts are telling me this is a scam. - Michael Bovee:
25 Mar 2015 I think you have good instincts. How long ago was it that you last paid US bank? - Eric:
26 Mar 2015 I have a credit card through HSBC that had a balance of $3000. My debt was passed off to a collections agency. They got in contact with my family, my mother and grandparents, and threatened them suing me. Naturally, my mother was concerned and worked out an agreement of $1,500 with the company. They accepted and took the money. Now they are calling stating that they sent me letters saying that HSBC did not accept the settlement, and that HSBC requires the full amount to be paid or they will serve me with papers. I do not understand how they could agree to the settlement, take the money, and then say it is not enough? Is that leagal? Can I fight them in court? - Michael Bovee:
27 Mar 2015 I moved your comment over to this page as it likely relates more to the debt collection situation you have. My fist concern is that you (your mother really) may have been scammed. Read above about what scan debt collectors do. Even if the debt collector is not an outright fraud, they stepped over the line calling family members and discussing the debt. I have some action steps you should take, but read through the article above first, and answer the following: What is the name of the debt collection company? What were the phone numbers used to call you and/or family members? When did your mother make that payment and what method was used? - Eric:
28 Mar 2015 I forgot that my insurance company at work had many identities stolen from their computers. I am now guessing mine was one of them. The number that called me was 724-552-4987. I believe my mother used a credit card a year ago to pay off the credit card. However, the card the caller is referencing is Best Buy, which I checked my credit report, that card was not issued by HSBC as the caller stated. So I am pretty convinced this is a complete scam using stolen information from insurance company! They have my DOB and my SSN! What do I do to stop them? Can I get the police involved if they are scam artists? I do not want other people going through this and possibly paying off scam artists! Thank you for all of your help, Eric - Michael Bovee:
28 Mar 2015 Have your mom call her credit card customer service and see if she can back out that payment for fraud. She should get all of the transaction information for the payment from them as well. File a police report if necessary. File a complaint with the CFPB using the link I provide in the article above. Be very specific with names, dates, phone numbers, and all involved. Provide transaction and payment details too. Pull her billing statement from the month she made the payment. See if there is a toll free number for the transaction details listed. If you see one, what is it? If they call again, try and get names of people and the company involved to include in your complaints. - eric:
28 Mar 2015 She paid Reynolds and Hill Associates about a year ago. I don't know if they are a legitimate collection agency? If it has been this long is she still able to get her money back? - Michael Bovee:
29 Mar 2015 She will need to call her credit card company to find out. She should file a police report and the complaint with the CFPB. - Chris:
31 Mar 2015 Michael, correct me if I'm wrong, when it comes to debt collection on things like this, a debt is a debt. There isn't secured debt, processed debt, anchored debt, unsecured debt, etc. It doesn't matter where the firm is located except for court purposes, they must have an established address in your state. Now, as far as "Best Buy will still sue you", they will sell off the debt to a collection agency and then their done with it. The agency buys the debt. It's up to the agency to decide to pursue. Agencies purchase debt portfolios - they didn't hand pick yours because it looked good. Also, they will try to fluff up the debt with monies that you don't really owe. This isn't exactly legal. Why do you think they offer a low settlement? If you pay what they ask for it's not illegal. If you catch them in a lie, they will get fined and you can get the true amount revealed. I personally wouldn't interact with them except via letter - certified always! (and maybe done through an attorney.) Having said that, you're past the SOL... send them a drop dead letter and don't touch it! Even if they claim you've made payments or somehow activated the debt again, call their bluff! Send that DD letter via certified mail and keep it on record for 10 years. If they contact you after you get that green card back. Print your phone records showing they called and file a complaint, collect the fee. Like Michael said, you know when you're getting sued when the Sheriff shows up and serves you. Nobody warns you. If they claim they sent a letter, they would have no issues sending a copy of the green receipt. Most of these claims are legitimate debt, but it's all zombie debt (past SOL). Now go get some ice cream and that knot in your stomach will go away. - Michael Bovee:
31 Mar 2015 It is not always the case that a debt is a debt. An unpaid debt with a security interest (secured debt such as a mortgage, car loan, even a furniture store) can lead to repossession, foreclosure, etc. It is not always true that a debt collector must have an established business address in your state. Perhaps some state regulatory licensing and bonding concerns, and even a registered agent for service of process, but not always a brick and mortar presence. I do like the sound of ice cream! - Alberto:
02 Apr 2015 Have been getting harassing calls from this company trying to what I believe is serve me some "court papers" from Kendall County in TX. I no longer live in Texas and have no ties with my HSBC card. I had to default on my credit due to me losing my job. I tried to contact Best buy who originally held the credit to work out a payment plan but couldn't get anywhere. Left it at that. Now 2015 this company tries to get a hold of me and says I will need to go to court and pay over $3,000 or settle and pay $1,015. Asked for my credit card information to collect and then told them I had none to give. Claimed I only had until today to respond with a form of payment or it would default to failing response and go to court for a judgement . For the record this has been closed on my credit report for years now from BestBuy. I feel violated if this is how a company works and how they were able to get this information from a legitimate company especially with the recent credit card breeches in the recent news. Please help as if this is legitimate I want to take care of this, but like most people when the words "court" "suit" "legal" the get scared. Please help. Thanks in advance. Commerce Recovery & Capital Management, LLC Phone: 855-817-4835 – Fax: 716-691-3086 Mon-Thu 8:00am – 7:00pm EST Fri from 8:00 – 4:30pm EST - Michael Bovee:
02 Apr 2015 I moved your comment over to this post Alberto. Read from the top of this article about scam debt collectors. Yours may be a case of a debt collector stepping way over the line. I would encourage you to fill out this form to consult with an FDCPA attorney at no cost. If they see your case as a clear violation, they could take your file at no cost to you, and help put this behind you. I would also consider filing a complaint with the CFPB, which I link to in the article. - Alberto:
02 Apr 2015 I have filled out the form and will be filing a complaint. I called the Kendall County clerks office to find nothing in my name pending. I have saved my voicemails and an email they had sent me in hopes it will help my case if indeed I have one. Thanks and will keep you updated. - Gloria:
07 Apr 2015 Michael, I was contacted today via telephone stating it was a courtesy call and I would be receiving a summons from CACH LLC., regarding an account that is about 15 to 20 years old. I defaulted on it approximately in 1994 owed about $700. They now want approximately $3500. I thought it was a scare tactics from a creditor I have not heard from in about 15 years. They were reflected negatively on my credit for 7 years. I live in Miami, Florida. What do you think of this? Could I possibly be sued 15 years later? Should I contact an attorney and who do you recommend? THANKS!!! - Michael Bovee:
07 Apr 2015 I moved your comment over to this page about collection scams, as that is what I think is going on here. Cach LLC is a legitimate debt collector, and they do sue... a lot (as you can tell from the page I moved your comment from). My opinion is that Cach knows enough to stay away from having any of their collectors trying to collect on ancient debts like yours. It is primarily for that reason that I think you are being scammed by a fake debt collector using the Cach LLC name. Read through the article above and use some of the resources and suggestions I give. Did you get any phone numbers for the collector? - JB:
17 Apr 2015 Hi got a voice mail from 425-209-1668 said had complaint with my name attached to call 888# with my case # said did reverse ck said invalid # called 888 said I had visa u paid balance of over 2000 but that the atty would take 1000 today to buy a prepaid card so they draft am out. I asked her for the collector she said Providian bank. I told give address the customer service # she said she wasn't allowed. I asked her give me full number of visa. She said it was in 1998. I live in Texas. She said she couldn't,and that all she had was last 4 digits. I asked for my social and she said all she had was last 4 digits but if I would provide it to them she would ask atty to verify. She said if I didn't pay the 1000 today end of business day this would be attached to my social and I'd be summoned to pay all of it? What do you think this sounds like a scam? - Michael Bovee:
18 Apr 2015 Yes, I do believe the collector is trying to scam you. I moved this comment to a more relevant article about fake debt collectors and scams. Read through the above article entirely and use some of the suggestions.