Money is tight and most Americans owe at least some credit card debt. That's no secret, and con men are just as aware of the problem as folks who find themselves behind on their bills. How do you know if the guy on the other end of the phone is trying to collect a legitimate debt or line his pockets?
1. Con men trying to collect a debt when nothing is owed to them is nothing new, is it?
No, it's an old game, but it's getting new life thanks to the sagging economy. As more people fall behind on their bills or have trouble paying off debts as quickly as they used to, random calls from con men have a better chance of success. Plus, the likelihood that a con man is going to reach someone who actually owes money or is in the red is greater now than in years past. There's more debt in the world, and more people are owing more money, so every time the con man punches in a number, it's more likely that he'll be talking to someone who owes debt suitable for collection. Since most people feel bad about owing the money in the first place, it's easier for the con man to shame them into making a mistake.
2. What's a typical debt collector scam?
Con men might contact you by phone or by mail demanding cash. They might identify themselves as being from a popular credit card company or other major creditor and say that you have to pay within the next 24 hours or they'll begin legal proceedings to garnish your wages or take some other severe action. They'll probably ask you to furnish a credit card number or mail a money order to cover the debt, but wire transfers are becoming increasingly common. That's bad news, because if you send money by wire transfer, it's extremely difficult for anyone in law enforcement to track the money. But it doesn't matter how the con man tries to collect the money; once it's gone, it can be extremely difficult to get it back. That goes for any sort of payment, but you should be especially concerned if a so-called collection agent is located outside the country. The con man, wherever he is, counts on pressuring you into making a mistake before you have the chance to think things over.
3. How do we prevent those mistakes?
The easy answer is to stay current on any of your bills to make sure you wouldn't get a call from a collection agency, so you don't have to entertain the call. Realistically, though, if you've got some aging debt, there's a chance a legitimate collector will call you. If you receive a contact like this, you need to make the caller identify himself and the debt. Don't fall prey to pressure or threats -- don't give out any personal data. Tell the collector you'll only respond to billings in writing and make sure that invoice matches your record. Of course, check out the collector with the BBB. Keep in mind that a legitimate collection agency, once hired to collect on a debt, generally owns that debt and will profit from your payment whenever you write the check. There's generally no need to rush things through on a credit card even if you do owe the money, and transferring your debt from one form to a credit card doesn't necessarily solve your problems.