The job of a debt collector is to reclaim funds on past-due accounts on behalf of individuals, creditors, or businesses. Unfortunately, sometimes the “debt collector” is a scam artist and is trying to steal your identity. They use threatening tactics and often times harass consumers. Before giving any of your personal information to a debt collector, your BBB recommends the following advice:
· Make sure they are legitimate. Ask for the debt collector’s name and contact information to research the agency further. Check with the BBB at www.bbb.org to see what information we may have on them. Check to make sure the representative who called is indeed affiliated with the agency. Also call the agency using a phone number from a public or online directory.
· Request written proof of the debt you owe. By law, a debt collection agency must provide a validation notice within five days of contacting you about the debt. Within 30 days of receiving their validation notice, send the debt collector a written request to further verify the debt details. Do not provide personal or financial information unless the validity of the debt and the debt collector has been confirmed.
· Avoid phony calls. Be wary if the debt cannot be verified or if no documentation is received. Advise them to stop contacting you and register with the National Do Not Call Registry at www.DoNotCall.gov or 888-382-1222.
If you do not owe the debt, your BBB recommends:
- Don't ignore the collector. It is best to respond immediately, even if you don't believe the debt is yours. Otherwise, the collector may continue contacting you or file a judgment.
- Don't pay just so the debt collector will go away. Do not claim a debt that isn't yours or make a payment on a bill just to make the collector "go away." Even just one payment can indicate that you are accepting the full responsibility of the debt. The invalid debt could also reflect as a liability on your credit report.
- Contest errors. If no debt is confirmed, contact any involved parties to clear up inaccuracies on your credit report, such as: the debt collector; the creditor or company claiming unresolved accounts; and the major credit bureaus. Write a detailed letter and include supporting documents to prove your case. The Federal Trade Commission provides additional resources for reporting errors.
- Check for identity theft. If contacted by a collection agency regarding erroneous bills or debts, it could be an indication of identity theft; an imposter may be using your identity to make purchases, open accounts and obtain credit. Review your credit report to quickly identify fraudulent activity or make corrections; visit www.annualcreditreport.com for a free yearly credit report and get FTC advice for Resolving Specific Identity Theft Problems relating to debt collectors.
BBB recommends doing the following for debt you do owe:
- Know your responsibilities. It is not against the law for a debt collector or creditor to contact you regarding unpaid debts. Try working with them to resolve issues. Discuss doing payment plan and request obligations in writing.
- Complain about abusive practices. Report harassment, threats and other violations of federal telemarketing laws to the FTC. File a BBB complaint if you believe a debt collector is acting unethically. Also, research state laws on debt collectors, which may vary.
- Stop collector calls. According to federal law, a debt collector cannot continue to contact you—at work or home—if you tell them to stop. Write a letter stating not to contact you anymore. Save a copy of the letter then send the original via certified mail and request a return receipt. If a debt is owed, the collector or creditor can still take legal action to collect funds and may contact you to inform you of their action.
If you feel you’ve become a victim of a debt collection scam, file a complaint at the following agencies:
- Better Business Bureau
- Federal Trade Commission.
- Internet Crime Complaint Center, if contacted by internet or e-mail.
- State Attorney General's Office and other local consumer affairs agencies.
- American Collectors Association (ACA International) processes complaints on its member debt collectors; find out if the debt collection agency is a member.