Better Business Bureau’s tips for avoiding debt collection scams

Debt can be a scary thing. Unfortunately, scammers take advantage of the already frightening situation of being in debt. According to AARP, the Federal Trade Commission received over 53,000 reports of debt collection scams in 2020.

These scammers often call, email, mail, social media message or text people posing as debt collectors, law enforcement officers, attorneys or process servers. They scare people – even threatening lawsuits or arrests - to get them to pay a debt they don’t actually owe. By using scare tactics, they are often able to get away with a nice chunk of change from their victims.

However, some debt collectors are legitimate and lenders do hire debt collection agencies to get people to pay their debt. It’s important to face your debt and try to cut it down through budgeting and prioritizing payments. Don’t let scammers make that process even more difficult for you.

Better Business Bureau offers these tips to avoid debt collection scams:

Hang up if you know you don’t have any outstanding loans.

Contact your creditor to find out if anyone has been authorized to collect the debt.

Be wary of any debt collector who withholds information from you. The collector has to tell you information like the creditor’s name, amount you owe and provide verification of the debt they’re claiming you owe.

Beware if the debt collector is harassing, unfair or abusive. Also, avoid debt collectors who claim they will publicly shame you if you don’t pay your debt.

Don’t be pressured into paying via wire transfer or prepaid gift card. Only pay in ways that can be traced.

Don’t confirm or provide sensitive personal information to any caller unless you’re 100% sure they’re legitimate.

Be wary of scammers who call you before 8 a.m. or after 9 p.m. as they’re likely scammers working outside of business hours.

Know debt collectors cannot charge interest, fees or other charges on top of what you already owe your creditor.

Check your credit report to see if you have outstanding debts and make sure there has not been any suspicious activity.

Place a fraud alert on your credit report if a caller seems to have a lot of your personal information.

Understand a legitimate debt collector will not insist you pay them right away.

Ask for a callback number, along with the caller’s name, company name and address. That way, you can research online to verify the caller is who they say they are.

To learn more about scams, go to BBB.org/scamtips. You can report them to BBB Scam Tracker (BBB. org/scamtracker). You can also report them to the Federal Trade Commission or your state Attorney General’s office.