Debt Collector or Scammer: How to Tell the Difference?

Scammers sometimes pose as debt collectors and collection agencies and try to get consumers to pay them. These types of scam artists often use abusive and harassing tactics in order to frighten you into providing bank and other personal information, while you falsely believe that you are paying real debts.

Many people are unable to tell the difference between a legitimate collection agency and a scammer. But there are some red flags to watch for that indicate that the collection call you receive is probably not from a legitimate collection agency.

Pay attention to these if you get a call from an alleged debt collector so you can avoid becoming the next victim.

How the Fake Debt Collection Scam Works

The scam is straightforward. Scammers will call consumers to collect debts, posing as real collection agencies. Often, the scammers will have already accessed your personal information through identity theft or by obtaining your credit report. By doing this, they will often appear to be “collecting” debts that you actually owe, making the scam seem very believable.

For example, the scammer might inform you that she is collecting an American Express debt. You might actually owe money to American Express, and thus could believe the caller works for American Express. The scam is that the caller actually has no relationship at all to American Express, and whatever money you fork over, isn't going to American Express. It goes into the scammer’s pocket, as well as any other funds the scammer can access with the financial information you provide.

How to Tell If You’re Being Scammed

Here are some tips to help you determine whether there is a real collection agency on the phone, or a scammer. (Learn what to expect when your debt goes to collection.)

The caller is abnormally harassing and abusive. Although legitimate collection agencies have been known to be abusive, scammers will often use over-the-top, aggressive, blatant threats. They will tell you that you are being served with a lawsuit immediately. Or they might say that they've contacted the police, or that you might be arrested. These are, of course, false threats. (Learn what legitimate bill collectors can and can't do under the Fair Debt Collection Practices Act.)

The caller demands payment “today.” A scammer will often insist on payment "today." There might be a penalty connected to nonpayment, such as the threat of a lawsuit by the end of the day, or some other threat which can only be avoided by paying immediately. Of course, collection agencies also want to be paid immediately. But rarely will they threaten immediate punishment or similar action if a payment is not made by the end of the day. (Read about common tactics that debt collectors use on the phone.)

The caller doesn’t accept various forms of payment. Most collection agencies will accept payment through some combination of mail, phone, website, or debit card. They want your money no matter how you get it to them. A scammer will usually insist on payment in a single way, for example, only allowing you to pay by credit card over the phone and refusing payment by any other method.

The caller refuses to give a physical address or name. If the collector can't give you an actual mailing address, or even the full name of the company on whose behalf he or she is calling, that's a sure sign of a scam. Any legitimate collection agency will readily give you this information.

The caller refers you back to the original creditor for information. A real collection agency knows something about your debt, or else will contact the original creditor themselves for information it doesn’t have. A real collection agency will never tell you to contact the original creditor, for any reason. If it 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, or it refers you to the original creditor for such information, it's likely a scammer. (You have the legal right to request that a collection agency verify the amount and validity of a debt.)

Someone answers the phone immediately when you call. Real collection agencies have complex phone systems, or receptionists, which route your call to a collection agent. If you call and the collector answers the phone directly, they’re likely using a cell phone, a telltale sign of a scammer.

You keep dealing with the same person. Legitimate agencies have multiple collection agents, and it doesn't matter which one you deal with. If you keep talking to "Frank Jones" every time you call, it's a sign that you might be speaking to a scammer.

What to Do If You Think You’re Being Scammed

The best thing you can do is not to pay anything or give away any of your personal information until you do some further research to find out if the caller is legitimate or not. Here’s how.

Do a Google search of the caller’s phone number. If it’s a scammer, your search will likely reveal others with similar problems. There are websites devoted to discussions about collectors. If you input the number the collector is calling from or the number where she requested you call, you might find others who have been threatened in the exact same ways that you have.

Call the original creditor. The original creditor should be able to tell you which company it has hired to collect your debt, or which company has purchased it.

What If the Caller Is a Scammer?

If you're convinced that the caller is in fact not a legitimate collection agency, the best thing you can do is ignore the calls. Scammers want quick turnaround and easy prey. If you won't respond, they will move on to someone who will. Once scammers believe they you are frightened or convinced that you owe the debt to them, and once they know you will answer the phone when they call, they see you as a target, and won’t let up.

Getting Help

If you suspect you're a victim of a scam, you may report it the Federal Trade Commission (877-FTC-HELP). If you’re receiving harassing calls from a legitimate debt collector, consider talking to an attorney to find out what you should do in your particular circumstances.