Articles

Stay Safe from Scams by Fraud Debt Collection Companies

by Shaswata Ghosh DM Executive
A debtor who has unpaid debts often gets calls from debt collection agencies. The agencies ask the debtors to pay off the debts. Usually, the original creditors hire the collection agencies to collect the debt on their behalf. Once you get a call from a collection agency, you should check if they are legitimate companies or a scam.

How to verify a debt collection agency?

Don't act impulsively

If you'd like to minimize your risk of a debt collection scam, you should wait to verify the information before continuing any conversations. For example, you can hang up the phone and call back using the contact information you find online or information you get from the local Secretary of State to ensure you're speaking with a legitimate company.

If a debt collector insists on paying immediately, please wait and take a deep breath. Do not agree to anything or share excess information. You must ask for a validation letter or proof of the lawsuit in writing to know if they are a legitimate third party debt collection agency.

Do not get intimated by a debt collector who asks to pay right at that moment over the phone. Any legitimate deal stays active for several days, and you would get enough time for background verification.

To reduce the risks of debt collection scan and to prevent yourself from the fraud traps, you should wait and verify the information before carrying on any conversation. For example, you can hang up the call and contact back using the same information you got online or from the local Secretary of State to ensure the company you are talking to is a legitimate company.

Other warning signs of a scam include:

• Notices that came via email
• Emails from domains like @yahoo.com, @gmail.com
• Anything that appears unusual or fishy – like the debt collector says police or immigration is coming for you
• The debt collector forces to pay in unconditional methods such as money transfer or prepaid credit cards

Don't ignore the debt collection lawsuit

Even there are scams, you should treat everything with equal concentration and concern. Rather start checking if that is truly a legitimate one, therefore, you would come to know if it is a lawsuit or a scam once you are done with due diligence.

If you ignore the lawsuit from a third-party debt collection agency, the court is likely to rule in the debt collector's favour. With the lawsuit, the collector can –

• Do wage garnishment and collect the owed amount 
• Put a lien against the debtor's property
• Freeze the bank accounts 
• Garnish the bank account funds

Don't accept liability

Restrict yourself from giving excess information. A legal debt collector may ask a few questions to verify who you are, but stop sharing confidential personal details unless you know the collectors are legitimate.

Do not give any apologetic statement or explain yourself as it can go against you for the same reason. Moreover, while explaining, you may mention another debt, which may drag you in a worse condition.

Never give access to your bank accounts

Unless you are assured about the legitimacy of the debt collection company, under any circumstance, do not give them your bank account details. Providing bank accounts can be the gateway of fraudulent activities such as fund withdrawal. Once they have the account detail, pretending a debt collection company, they can withdraw more than the debt agreement.

Beware of debt settlement services

While researching how to pay off your unpaid debts in debt collection, you might have come across debt settlement companies. Try to avoid them if possible. They typically start well with the consumers and leave them in a worse position than before. Moreover, debt settlement always hurts the credit score.

If you plan to work with a debt settlement firm, make sure that you know well where you are going. Not all the creditors tie up with the debt settlement companies and you have to pay a fee to them for managing the debt settlement.

If you are an original creditor, this is for you also. Find a legitimate debt collection company, otherwise, scammers can trap you also. Follow background verification check before hiring one.

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About Shaswata Ghosh Freshman   DM Executive

9 connections, 0 recommendations, 42 honor points.
Joined APSense since, March 3rd, 2021, From New Delhi, India.

Created on Mar 15th 2022 02:41. Viewed 101 times.

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