These are the tactics of a new generation of debt collectors. The problem is these debt collectors are nothing more than common thugs, scammers using illegal and intimidating methods to force people to hand over money for debts they don’t even owe.
Here’s how it works.
You receive a very official looking email citing you for failure to pay off a payday or other loan. The “loan company” or “debt collecting agency” informs you they tried to debit your account for re-payment but received notices of insufficient funds.
In the typical scenario, they now threaten to criminally prosecute you for violation of banking regulations, collateral check fraud, theft by deception and/or electronic funds transfer fraud, – all very intimidating sounding charges.
Often it’s enough to make the recipient call the agency’s number to arrange a payment plan for the so-called debt.
What makes the scam so believable is that the scammers often possess quite a bit of our personal information – last four digits of our bank account number, email address, phone number, place of employment, etc – which they use to make the threat sound more legitimate.
And the thieves seem to cull their list of victims from people who may have taken out payday loans or small loans in the past.
This is exactly what happened to my brother recently when he received such an debt collector email. It was only after a day’s worth of investigation and talking with a “representative” of the company that he was able to figure out that it was a complete scam.
But they did make it seem quite believable, going so far as to even outline the consequences of his failure to pay his outstanding debt. In their email they warned:
“WE HAVE ALL THE RIGHTS RESERVED TO INFORM TO FBI, FTC, YOUR EMPLOYER AND BANK ABOUT FRAUD.
And once you’re found guilty in the court house, then you have to bear the entire cost forthis law suit which is “$4271.15 excluding the loan amount, attorney’s fees, and the interest charges.”
Other victims don’t get off as easy as my brother. They’re subject to the phone version of a scam in which the so-called payday lender or collection agency repeatedly calls the victim’s job, friends, and family demanding payment for an outstanding debt.
So what’s the one simple thing you can do to determine if you’re dealing with a legitimate debt collector or if your being scammed?
Simply ask for a written proof of debt. When my brother did this with his “debt collector” the agent simply hung up.
As noted by the Florida State Attorney General:
A debt collector is required to send you a written notice within five days after you are first contacted, telling you the amount of money you owe. The notice must also specify the name of the creditor to whom you owe the money and what action you should take if you believe you do not owe the money.
BMWK, have you ever been the victim of fraudulent debt collectors? Are you aware of other scams the BMWK community should know about?
like what you're reading?