For several years, fraudsters from India targeted people that used payday lender services and collected millions of dollars from victims. Payday lender services are usually used by people as a last resort way to borrow money when they have no other option. The reason it is and should be a last resort way to borrow money, is because interest rates on such “loans” are nothing less of outrageous. As such, people using payday loans are usually ones facing extreme financial hardships. These fraudsters, based out of India, somehow were able to access information about the borrowers and posed as debt collectors for the payday loans. They used numerous tricks to defraud people already in trouble, including threatening to put them in jail and contacting their employer. As you can imagine, those threats would be scary enough when you are not having financial difficulties, but compounded with the financial pressure these individuals were under, these threats proved to be very lucrative for the fraudsters and extremely hurtful to the victims. Click here for the full story. While it is great that in this case the Federal Trade Commission stepped in to help out any future victims, oftentimes, consumers are left to fend for themselves. As is often the case, fraudsters target people that are in trouble.
What you can do to protect yourself from debt collector harassment? Below are some tips on how to deal with a fraudulent debt collector and signs that it may be a scam.
1. Ask for written proof of your debt, before you discuss anything. Tell them to not contact you until they provide sufficient proof of the debt. Ask them for the address of their company so that you can make the request in writing. If the response is threats and unintelligible contact information, it is likely a scam.
2. Get proof that they have the right to collect said debt. Example: if they claim they are collecting the debt on behalf of Wells Fargo Bank, NA. Have them provide proof from Wells Fargo that they are authorized by Wells Fargo.
3. Don’t provide any additional personal information. They called you, so they should have it. If they don’t have it or claim they are trying to verify your information, tell them to cease contacting you and provide the information request in writing on company’s letterhead.
4. If they are speaking quickly and unintelligibly and are not clearly providing the name, address, phone/fax information of the company they are claiming to be calling from, it is likely a scam. Beware and don’t make a payment.
5. If they threaten to call your employer, tell them they are forbidden by law to contact your employer. If they argue, it is likely a scam. If they appear to have your employer’s contact information, you may want to inform your employer that you are a victim of fraud and they should not discuss your personal information. When the debt is valid, creditors will be able to obtain a judgment and then wage garnishments orders. Employers are familiar with valid ways creditors can contact them and should be on guard re. any suspicious contact by creditors.
6. Feel free to inform the caller that you will be recording the conversation and actually record the conversation. Tell them you will be forwarding a copy to the FBI.
7. Remember, that owing a debt does not allow the collector to put you in jail. Any threats re. jail are fraudulent and illegal. Debt collectors know that, but are hoping that you don’t. If they continue to threaten you with jail after you show them that you know the law, it is likely a scam.
8. Finally, remember that engaging with professional debt collectors or worse yet fraudsters and trying to explain your situation is futile and will just lead them to call you more. Request to conduct any and all exchanges in writing.
Don’t ever make a payment over the phone, until you have proof of debt. Even after that, I would recommend sending a check or a money order if/when you have the funds and proper contact information. Taking the time to make sure you are sending money to a valid creditor is important. Trying to resolve things when you are stressed out and scared and feeling under threat will lead to mistakes. Don’t be a victim. Empower yourself with knowledge.
Our office can help you deal with your debt problems and protect you from creditors. Feel free to call for your free, initial consultation at (310)481-5098.