The debt collection scam 2.0 is making the rounds

Here are ways to tell if you are being targeted with the fake debt collector scam - (c) ConsumerAffairs

The scam may have resurfaced because so many people are now in debt

The fake debt collector scam has been around for at least two decades. It’s resurfaced now with a frightening vengeance.

With this scam, the operators claim to be collecting a debt that they say you owe. They use threats and intimidation to get you to pay.

It’s resurfaced now for one big reason – so many people are in debt. Maybe they have numerous debts and they believe the scammer’s lies, so they’re vulnerable.

How it works

Here’s how it works: You receive a call or text from someone who claims to be from a lender, or maybe the lender’s lawyer. Some even masquerade as government officials.

If you say you don’t think you owe anything the threats begin. You’ll be taken to court, maybe even arrested. You’ll have to appear before a judge in another state. Your wages will be garnished.

But these are empty threats designed to scare you into paying. Here’s what would happen if you really did owe some money:

  • A debt collector could call you but not before 8 a.m. and not after 9 p.m.

  • A debt collector can’t call you at work if you tell them you are not allowed to accept personal calls

  • A debt collector may call a family member, but only to find out how to contact you

  • A debt collector can’t access your bank accounts with a judge issuing an order

People in debt have rights

Consumers are protected by the Fair Debt Collection Practices Act (FDCPA). The FDCPA prohibits debt collectors from using abusive, unfair or deceptive practices to collect debts from you. 

If a debt collector engages in any of these actions they are probably scammers and the debt is fake. If they are a legitimate debt collector, they are breaking the law.

The FDCPA applies to mortgages, credit cards, medical debts and other debts for personal, family or household purposes.

If you don’t think the debt is real, you are better off just hanging up. If you have a lingering doubt, call the customer service department of the financial institution by looking up the number online and asking if you owe any money. By not engaging with the caller you don’t allow the scammer to begin the threats.

If you think the debt could be legitimate, ask the caller for a “validation notice” of the debt. Debt collectors are required to provide this in writing. Such notices are required to include the amount you owe, the name of the creditor and a statement of your rights. If the debt collector can’t or won’t provide this document, they’re running a scam.

The Federal Trade Commission reports there were 124,450 reports of debt collection fraud. The Consumer Financial Protection Bureau (CFPB) lists debt collection as creating the second-most consumer complaints in 2023, suggesting a large number of scams in this sector​.