The BBB has recently received several calls from concerned residents concerning at least two variations of this type of scam over the last two weeks.
The first scam involves scammers calling consumers and informing them they would be arrested by local law enforcement in the immediate future if they did not immediately remit payment for a payday loan they took out months or even years prior.
In most cases, residents have never even taken out these loans, but the BBB has received reports of people paying hundreds of dollars to avoid the possibility of arrest.
These callers are also persistent and violate state and federal phone collection laws by calling at all hours of the day and night to home, cell and work numbers.
Scammers do this in order to either annoy residents at home or embarrass innocent employees at their work place in order to pressure them into paying in order to stop the harassment and threat of possible job loss.
A second, newer version of this scam involves scammers having consumers divulge personal information in order to trap them in a phishing scam.
The scammers call and/or leave a message informing the resident that they are a collection agency trying to collect a debt.
When the call is returned, they are instructed to enter a Social Security number into an automated system in order to continue the process and speak to a live representative, leaving the consumer a victim of identity theft.
After the number is entered, the scammers then try to talk the consumer into making an immediate payment using bank account or credit card information, opening up the likely possibility of immediate financial loss through theft.
The BBB offers the following tips to avoid being taken by a debt collection scam:
• Ask the debt collector to provide official documentation which substantiates the debt.
• Do not provide or confirm any bank account, credit card or other personal information over the phone until you have confirmed the legitimacy of the call.
• File a complaint with the Federal Trade Commission online if the caller is abusive, uses threats or otherwise violates federal telemarketing laws.
• Confirm any debt a debt collector claims you owe money. Be sure there is an outstanding balance and try to pay the business you owe directly before dealing with a debt collection agency.
• Start With Trust. Check out businesses in the U.S. and Canada at bbb.org.