Beware of Debt-Collection Scams

Don’t be the next victim of a debt-collection scam! Here’s all you need to know about these scams:

How the scams play out

In a debt-collection scam, a caller claiming to represent a debt-collection agency demands immediate payment for an alleged outstanding debt. The caller insists on specific means of payment and may threaten to tell the victim’s friends about the unpaid debt. The alleged debt may be completely fabricated, or the scammer has hacked the victim’s accounts to learn of its existence. In either scenario, the caller does not represent the creditor and will pocket any “collected” money.

These scams can also take the form of abusive debt collection, in which a caller collects money for a legitimate debt, but does so using abusive and illegal practices.

How to spot a debt-collection scam

You might be looking at a scam if an alleged debt collector does any of the following:

  • Withholds information about the debt and the creditor
  • Threatens the debtor with jail time
  • Insists on specific means of payment
  • Asks to be provided with personal financial information

Know your rights

When outstanding debts go unpaid, a lender can legally sell the debt to a collection agency. The agency can then attempt to collect the debt through letters and phone calls.

According to the Fair Debt Collection Practices Act (FDCPA) , debt collectors cannot:

  • Contact borrowers at unreasonable hours.
  • Call borrowers at their workplace if the borrower said they cannot accept phone calls at work.
  • Harass borrowers about a debt, including using threats of violence and calling the debtor multiple times each day.
  • Engage in unfair collection practices.
  • Lie about the money owed.
  • Falsely represent themselves.
  • Threaten the debtor with jail time.
  • Falsify the name of the agency they represent.

 Protect yourself

If you’re unsure of whether you are being targeted by a debt-collection scam, ask the caller for a callback number and to confirm information about the debt. The collector should know the amount owed and be able to tell you the name of the company behind the debt.

If you still believe you are being scammed, contact the creditor and ask if the debt collection has been outsourced to another company.
If you’ve been targeted

If you’ve been targeted by an illegitimate debt collector, report the scam at ftc.gov/complaint. If a falsified debt appears on your credit report, you will need to dispute the charge as well.

If a collection agency is employing abusive tactics or if you’d like them to stop calling you, it’s best to send them a letter asking them to cease all contact. Once the agency has received the letter, they can only reach out to you to confirm there will be no further contact, or to inform you of a specific action they are taking.


Don’t forget to check the latest scam alerts. Contact the FTC for help if you’re targeted by a scammer.

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