How Do I Know if a Creditor’s Call is Legitimate?

With debt collection scams flourishing in the current economic climate, people are understandably hesitant to give out personal information before verifying that a call is legitimate. Unfortunately, very few people know how to tell the difference between a real debt collector and a scammer. Since a scammer will likely have already illegally accessed your credit report, they most likely be posing as a real debt that you currently have, complicating matters worse. However, the following are red flags that the “creditor” you are talking to is not legitimate:

• The caller is unusually abusive or harassing. Although real collection agencies have been busted for being harassing as well, scammers use over-the-top, blatantly false threats. If they tell you that by not paying you will be arrested or served a lawsuit immediately on an early collection call, they probably are not legitimate.
• The caller only accepts one form of payment. Most legitimate debt collectors are happy to get payment any means possible and will accept some combination of payment by mail, phone, website, direct deposit, or debit card. Scammers don’t have as much flexibility. If the person on the phone insists on a single form or payment, especially by credit card over the phone, they are not likely to be real collectors.
• The caller insists you must pay today. While there will be pressure to pay off your debt quickly no matter what, if the collector refuses to negotiate a payment plan, you should be suspicious.
• The caller can’t answer questions about your debt or refers you back to the original creditor. A real debt collector will have all the relevant information about your debt. Real collection agencies never should tell you to contact the original creditor for any reason whatsoever. If the caller cannot provide you with basic information about the debt, such as the date of default, amount of principal vs. interest, account number, whose name the debt is in, or other information, he or she is probably fake.
• When asked about his or her company, the caller refuses to give you a physical address. This is a sure sign of a scam. A real creditor must provide this by law.
• When you call the creditor back, someone answers the phone immediately. Generally collection agencies are set up with complicated phone tree systems and receptionists before you talk to a relevant employee about your debt.
• You always deal with the same person. Most collection agencies will just direct your call to the agent who is available when you call, so if you are always speaking with the same person, it is a sign something may be wrong.

What You Can Do to Verify a Creditor

If you have noticed a red flag come up while speaking with a debt collector, you should verify that the debt is legitimate before giving out any personal information, and especially any financial information. Even answering questions to verify your identity can give a scammer information to use against you, so it is best to confirm that the creditor is real before releasing any pertinent information. A real collection agent should understand and give you time to do the following:

• Refuse to discuss the debt without a written “validation notice.” The notice should include the amount of the debt, the name of the creditor you owe, and your rights under the federal Fair Debt Collection Practices Act. Without this validation, you should not consider paying.
• Get the collector’s address and send a letter demanding that they stop contacting you by phone. By law, real debt collectors are required to terminate contact when requested in writing.
• Contact the original creditor to verify the collection agency that they are using. If the debt is real, but you do not believe that the collector is, contact the original creditor and let them know that you have been called by someone you believe is a scam artist. They should be able to confirm the name and address of the agency used.

By doing these three things to confirm the identity of the caller, you protect yourself from damaging financial consequences. If you are still not sure about the legitimacy of a creditor after taking these actions, you should contact an experienced professional to help you be sure.

The Federal Trade Commission or your state Attorney General’s office may be able to help you identify suspicious callers. If you need answers immediately, a knowledgeable consumer lawyer can also investigate for you. At Luftman, Heck & Associates, our lawyers are happy to give you a free debt consultation and help you get to the bottom of these types of situations. Call us anytime at (888) 726-3181 to set up yours.