Managing Debt

9 Signs You Are Talking to a Debt Collection Scammer

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Consumers are forking over hundreds, even thousands, of dollars to debt collection scammers. Our reader Ashley wrote:

“They told me that my loan had gone into default and if I did not pay the $398 they would send a sheriff to my job or home to serve me with court papers and I would be ‘behind bars’ for 6 months. I got scared … They told me to go to Walgreens and get a Vanilla reload network card and call them and give them the 10-digit number on the back. So … I did it.”

Ashley was scammed, just like thousands of consumers across the country have been. Don’t let it happen to you. Here are nine tip-offs that you are dealing with a debt collection scammer.

1. He claims to be calling from a courthouse or threatens a lawsuit.

If you are actually sued for a debt, you won’t get a call. Instead, you will be served with a legal notice (typically a complaint and summons) that contains instructions for responding. A variation on this scam is when someone calls and says that a lawsuit will be filed immediately if you don’t pay. That can also be a red flag: Under the federal Fair Debt Collection Practices Act, collectors can’t threaten to take action they can’t legally take or don’t intend to take. If you are sued, you must be given time to respond.

2. She says you’ll be arrested, prosecuted for check fraud or even jailed.

You can’t be arrested simply because you can’t pay a debt. (There are times when consumers are arrested in conjunction with debts, but it is because they failed to appear in court when summoned, or failed to pay legal fines.) As the Better Business Bureau’s Kathleen Calligan notes, “A bad debt is not a criminal matter — it’s a civil matter.”

3. He impersonates law enforcement.

The caller may even offer to give you his or her “badge number.” This is almost a certain sign of a scam: Local law enforcement is not going to call you to try to collect a personal debt, and the FBI certainly won’t. If they claim to work with the sheriff’s office or FBI, tell them you will call them back at the published number for that agency. No doubt you’ll find out they were lying.

4. She has a heavy accent.

While an accent isn’t by itself a sign that you are (or aren’t) talking to a collection scammer, many are based overseas. The phone number that appears on caller ID may make it seem that they are calling from the United States, but that’s because that number is spoofed (faked). One commenter on our blog, who worked briefly for one of these outfits in India, suggested asking the caller to hum a few bars of our national anthem.

5. He is collecting an old payday loan you aren’t sure you owe.

Just applying for a payday loan online puts you at risk because some of these sites are designed to collect personal information for identity theft purposes. Because these scammers have such detailed information from the borrower – including Social Security number, place of employment, etc. – it’s easy to think the debt is legitimate. But that doesn’t mean it is.

6. She says she’ll tell your friends, relatives or employers about your debt.

These crooks are hoping to either embarrass you or scare your relatives into paying the debt for you. But federal law forbids collectors from discussing personal debts with anyone other than a co-signer or spouse. They can call other people only to locate a debtor; once the debtor has been found, those calls are supposed to stop.

7. He insists you pay immediately via Western Union or a prepaid card.

These are favored payment methods of scammers because they can’t be easily traced and the funds are available almost immediately. There’s no opportunity for the debtor to stop payment, as there would be with a check, for example.

8. She stonewalls when you request information.

Ask for the debt collection agency’s name, address and phone number. If the caller provides it, check to see if the information is legitimate. If in doubt, contact your state attorney general’s office to find out if the firm must be licensed to collect debts in your state, and if so, whether it is. If the caller won’t provide you with contact information, the conversation should end there.

9. He refuses to send you written notice of the debt by postal mail.

This is a key thing to look out for. Federal law requires that a collector to notify you in writing of the debt within five days of contacting you the first time. If the collector hasn’t sent you anything by mail, ask them to do so. Email is not an acceptable substitute; insist on this written notice. Once you’ve received it, you have 30 days to dispute the debt and request verification.

A number of readers of the blog have experienced more than one of the tactics from this list. Ron wrote:

I have just had this happen and they got my work phone # through my company cell phone. He (the Law enforcement official) as he represented himself, would not give his company info or address. When I asked for written verification, he refused and said the police were on the way to get me. He had a similar conversation with my boss the night before… I am a criminal justice major and I have to say that it shook me up.

If you encounter a collector who engages in any of these tactics, take time to investigate whether the caller is for real. If you let yourself be pressured or rushed into paying, you may wind up paying a crook.

Image: Ingram Publishing

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  • Carl

    what about commercial debt? I was told that the same rules do not apply.

    • Gerri Detweiler

      You are correct. The federal Fair Debt Collection Practices Act does not apply to business debts. But a scam is a scam either way, and consumers should try to make sure they aren’t paying a scammer.

  • Credit Experts

    Good for you. And thanks for sharing your story.

  • Credit Experts

    Kristine —
    They are trying to scare you. Knowing the last four digits of your Social Security number will not allow them to garnish your wages (that would be done only after a court judgment). A legitimate agency would send you validation of the debt by postal mail if you requested it. This caller appears to be trying to use fear to get you to pay. If you know the name of the agency, you can try reporting it to the Consumer Financial Protection Agency.

  • Gerri Detweiler

    If you received a call from a collection agency they are required by law to send you that written notification of the debt. They can’t tell you that you have to go to the bank to get it. Statute of limitations is typically based on the state where you live, unless you sign the contract and other state and subsequently moved. Be careful here. Sounds like some red flags to me.

  • Credit Experts

    Sounds like a smart move. If you didn’t receive a written validation of the debt, you should ask for — and receive — a second one.

  • Gerri Detweiler

    The problem is, I don’t see how you talk them into wiring you any money. Their game is to take your money up front. You may also want to read this article: 7 Ways to Stop Debt Collection Scam Calls

  • Gerri Detweiler

    So glad you got good advice!

  • Gerri Detweiler

    First of all, I agree it suspicious that a process server would call you saying they were going to serve you. Process servers don’t get paid unless they are successful so they don’t call people in advance usually; they just show up.

    Also, it is illegal for a debt collector to misrepresent themselves. So if they are misrepresenting themselves as law office (and they aren’t) or as process servers (and they aren’t), they are acting illegally.

    I would suggest you insist that they send you written notice of this debt by mail which you are entitled to by law. They can certainly serve you as well, and if they do then you can decide how to respond. But quite honestly, if they were going to serve you they would anyway – so I’m not sure that you’re at any kind of additional risk here. The whole thing just sounds fishy.

    Do you know what the name of the collection agency is? Have you checked them out to make sure their legitimate?

  • Gerri Detweiler

    Simply inquiring about the debt should not extend the statute of limitations which starts with the last payment on the account.

  • Gerri Detweiler

    No you did not.

  • Kali Geldis

    Hi Kelvin —

    Thanks for your question! It sounds like you’ve come across a scam — any legitimate debt collector must respond to a request to verify a debt’s legitimacy under federal law. If you want to make the phone calls stop, you can always add your phone number to the national Do Not Call Registry if you haven’t already done so, though scammers are not necessarily going to follow that federal law while trying to scam you.

    Keep your head up and let us know if we can help with any other questions!

  • ceece

    I had a voicemail on the housephone stating that they are inspectors of a company called Wilsons Company and they are collecting a debt for a payday loan that was way past due which was I remember it was on 2013. However, they were so demanding and rude and that i asked whats their name information address and their phonenumber. There was a name and the business name but when i googled the business to see if they were legit, there was no website with their company and when i typed their number on google, there was alot of complaints regarding them being a scam. Again, i did more research if there was another company associated and so while i was browsing, there was a collection agency and called that actual agency, and i spoke to a lady and says that they were not associated with them and they searched my name if I was in their system. None and unheard of. The lady told me a similiar incident that happened to one of her corporate managers and that maybe they were associated because it was the same number. Then I called the payday loan about it, they still havent called me back. Then from what the Wilson company says that they filed a case on me and that they will get me arrested the next day if i dont pay them. Of course i didnt give in. I reported the harrasment and threat to the Consumer Financial Protection Bureau. Waiting for Response. Then this morning I called them again and they said a different company name One was “LA magazine, Stanley enterprise, and then importer transport.” they were so demanding… Isnt this suspicious act?

    • Gerri Detweiler

      Yes the whole thing is suspicious. If they are scammers I recommend you not engage with them. The more you do the more persistent they will be!

      • ceece

        Agreed and they assumed that i signed something that i havent even recieved at all and they said that they went to the house and i signed it. Which i havent signed anything and i dont remember signing anything or anybody came to the house. Its wierd

        • Gerri Detweiler

          Ugh. But you’ve seen from the comments on this article you’re not the only one dealing with this.

          • ceece

            I know ive read them and its very useful information. Thank you

      • ceece

        And i already reported them to the ftc and i reported them to the cfpb regarding the issue. And of course i filed a complaint against them

        • Gerri Detweiler


  • Credit Experts

    Congratulations on not paying. Trying to frighten and intimidate people into paying money they don’t owe isn’t uncommon at all, unfortunately.

  • Credit Experts

    Barbara —
    If the account has had no activity for 12 years, it wouldn’t be on your credit report at this point (it should have been removed 7.5 years after it was first reported late). What probably happened was a debt collector bought a lot of bad debt, including yours, and is attempting to collect, whether the debt are still valid or not. Here are a couple of resources that may help you figure things out:
    Does Your Old Debt Have an Expiration Date?
    Statute of Limitations On Debt Collection by State

  • col

    Im getting multiple emails from different ppl claiming I owe on payday loans all different companies all different amounts and all different dates the biggest problem is IVE NEVER TAKEN OUT A PAYDAY LOAN???

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