The phone rings and you pick up. The person on the other end claims that you owe them or the company they work for money. Sure, they know your name and have your phone number, but you wonder if this is a scam. After all, with 77% of Americans owing some kind of debt, according to the Consumer Financial Protection Bureau (CFPB), it’s easy for debt collection cons to find and fool their next victim. However, it’s also easy to fight back with these quick tips.
What is a Legitimate Debt Collector and When Can They Call?
A real debt collector is a company department or third-party entity that works to collect past-due debts and bills. These debts can be for other companies or the debt collectors themselves. Either way, there are only two reasons a debt collector should be calling:
- They believe you are past due on a debt.
- They believe you can help them locate someone who is past due on a debt.
Ask for Details and Verification
Anytime a debt collector calls, ask yourself if you knowingly owe a company money, such as a car or home loan or credit card debt. If you do not owe money, then hang up. If you do owe money or have been late with some payments, ask the debt collector to provide their name, company name, company street address, company telephone number, and professional license number. You can verify some of that information with the Montana Division of Banking and Financial Institutions.
Once they give you those details, ask them to mail or email you a complete rundown of the debt owed. By law, they must send that information within five business days of your initial contact. After that, you have 30 days to reply. This will give you time and the information needed to verify the debt collector and dispute the claim if needed.
There are some clear red flags to watch for when talking to debt collectors. Watch for these telltale signs of a debt collection scam:
- Threats of criminal charges or time in jail. A legitimate debt collector will not threaten you. Plus, the only time you can be arrested for past due debt is if you do not comply with a court order.
- Refusal to share company information or debt details. By law, debt collectors must supply validation information. This includes a statement about your debt and the company you owe; your name and mailing address; the account number associated with the debt; an itemization of the current amount of debt, fees, interest, and payoff amount; and the creditor’s or debt collector’s contact.
- Pressure to pay today. All debt collectors must give you a 30-day period to dispute the debt.
- Pressure to share personal financial information. Never share your bank account numbers or debit card information with a debt collector. If they are legitimate, use a credit card, send a check, or pay using Online Banking.
Filing a Complaint
If you get a call from what you suspect is a debt collection criminal, submit a complaint to the CFPB. As a Montana citizen, you can also contact the state Attorney General’s office to point you in the right direction if you become a victim of one of these scams.
Take Control of Your Debt with Clearwater Credit Union
We have the tools to help you take control and reduce the stress of too much debt before it hurts your credit and financial future. That includes free financial counseling to help build a budget and navigate the world of money, as well as debt consolidation loans for a clean financial slate.