How to Recognize and Avoid Debt Collection Scams

Always check on your debts before you agree to pay anyone.
September 22, 2016

Receiving a call or email from an agency trying to collect on a debt can be scary.   It can be difficult to figure out if you truly owe the debt you’re being contacted about, and, if you do, if the amount owed is accurate.

Debt collection calls can be scaryScammers pretending to be debt collectors are counting on making their victims too stressed to figure out that they’re lying about debts in order to steal your money.

In the debt collection scam, the scammer calls and tries to pressure the victim into paying for debts that the victim doesn’t currently owe. These could be debts they’ve completely made up, or debts that you’ve already paid.

If you get a call from a debt collector, make sure that you verify the debt before you admit that it’s yours or begin to pay it.  Even if you do owe the debt, verifying it before you pay will help ensure that you have the widest variety of payment options available to you and that you’re paying it to the appropriate company.

In order to verify the debt, request in writing that the debt collection agency send you a letter that tells you what is owed and to whom.  Per the FTC Fair Debt Collection Practices Act, collection agencies are required to send this letter within five days of contacting any debtor.  Keep a copy of the letter you send requesting this information in your records, as well.

You also can contact the original creditor—the company to which you owe the debt. They should be able to tell you to which collection agency they sold your debt.  Be aware that this original collection agency may have sold your debt again; you should be able to contact this collection agency and ask about the status of your debt.

Be certain to check your credit report.  The information that the collection agency gave you and any notes about debts owed on your credit report should match. 

If there are any discrepancies, there could be a mistake in the debt, due to a misunderstanding about the name of the person who owes the debt, or due to fraud—someone could be using your social security number fraudulently.

Most likely, if it was a scammer who contacted you about the debt in the first place, they won’t bother sending you a letter about the debt at all.


If someone is calling to ask you to pay a debt, and you’re unsure if the request is legitimate, or a scam, here are some questions to ask:

Will the caller give you their full contact info? A legitimate collection agency will want to get paid, so they will want you to have their contact information so you can reach them again.  Ask the person calling you for their name, the name of the collection agency they work for, their extension number, and their department.  Then, look up the contact information for the collection agency and confirm its validity. Call and ask to speak to the representative at their extension.  This will at least prove that the caller was a legitimate representative of that collection agency.

Will they tell you who the original creditor was? A legitimate debt collection agency will be able to tell you what account they’re collecting on, and will send you a letter substantiating that you owe the debt.  If they won’t do so, the request for payment is probably a scam.

Are they pressuring you to give them your personal or financial information? The collection agency should be able to give you a timeline on which you can pay, and they will let you call them back or send your payment through another method at a later date.  If they are pressuring you to pay immediately before you can verify the debt, it’s probably a scam.  Additionally, pressure to give up your personal information, such as your social security number or credit card number, could be an attempt to steal your identity.  With this personal information, scammers can open new credit card accounts or take out loans in your name.

Are they using high-pressure scare tactics? In the United States, you cannot be jailed for owing a debt, and a debt collection agency cannot call the police or the FBI to arrest you. If the caller is threatening you with arrest or imprisonment, it’s a scam.


Be aware that if a legitimate debt collection agency mistreats you, they could be breaking the law.  The Fair Debt Collection Practices Act requires debt collectors to send debtors written proof of debts, and prevents debt collectors from using threats of violence or harm against an individual, property or reputation. Collectors cannot threaten to garnish a consumer’s wages unless they intend to do so. 

Consumers across the country have filed numerous cases in federal court alleging violations of the act.  Additional information, and the full federal act, can be found on the Federal Trade Commission’s website.


More Resources

BBB Scam Tracker – Read about trending scams or report a scam.

Sample Debt Validation Letter – a sample letter you can copy, update with your own details, and send to debt collectors whose requests you’d like to verify

FTC Tips on Fake Debt Collectors

Full Text of the Fair Debt Collection Practices Act