BBB Tip: Phony Debt Collection

Debt collection scammers are scary and persistent. They'll try to convince you that you must pay some overdue payment or face dire consequences like being sued, having wages garnished, getting arrested or having to appear in court.

past due stamped on invoiceDebt collection scams are one of the most frightening and persistent scam types. Scammers harass you for weeks or even months, both at home and at work, trying to get you to pay a debt you don’t even owe. Scammers will often know personal information about you and your family members, and have been known to threaten relatives into paying up.

How the Scam Works:

The scammer calls and tells you that they work for a loan company, law firm or government agency, and claims to be collecting an overdue payment. When you reply that you don’t owe money, the “debt collector” starts to make threats of suing you, having your wages garnished, arresting you, or forcing you to appear in court thousands of miles from home.

Despite the threats, these "debt collectors" don't have any legal power. In most cases, the alleged overdue loan doesn't even exist. Don't give in and pay money you don't owe. If you do, the scammer will likely be back for more.

Tips to Spot This Scam: 

  • Ask the debt collector to provide official "validation notice" of the debt. In the U.S. and most of Canada, debt collectors are required by law to provide this information in writing. The notice must include the amount of the debt, the name of the creditor, and a statement of your rights. If the self-proclaimed collector won't provide the information, hang up. 
  • Ask for more information. If you do owe money and aren’t sure if the caller is real, ask for their name, company, street address, and telephone number. Do not provide any bank account, credit card, or other personally identifiable information over the phone. If the collector is legitimate, they should have details on the accounts in question.

To report a scam, go to BBB Scam Tracker.

To learn how to protect yourself, go to “10 Steps to Avoid Scams”.

Last Reviewed: March 7, 2017