Key takeaways
- Real collectors must give you written details about the debt. Scammers often refuse.
- Threats of arrest or jail over a consumer debt are a red flag.
- Never pay by gift card, wire transfer or crypto, or give account details to an unverified caller.
- Look up the creditor’s contact information yourself to check a debt.
- Report scams at ReportFraud.ftc.gov.
You get a call: you owe money, and if you don’t pay today, there will be “legal consequences.” It sounds urgent. It may also be fake. Scammers posing as debt collectors, sometimes called phantom debt collectors, use fear to get people to pay debts they don’t owe or have already paid. Here’s how to tell the difference.
Warning signs of a fake debt collector
According to the FTC, a caller may be a fake debt collector if they:
- Want you to pay a debt you don’t recognize.
- Refuse to give you a mailing address or phone number.
- Threaten to have you arrested or report you to law enforcement.
Other red flags include:
- Pressure to pay immediately, today, before you can check anything.
- Unusual payment methods: gift cards, wire transfers, cryptocurrency or payment apps.
- Requests for sensitive information like your full Social Security number or bank login.
- Threats to tell your employer, family or friends about the debt.
- Knowing some real details about you, like part of your Social Security number, to seem legitimate. Scammers sometimes buy stolen data.
What real collectors must do
A legitimate collector has to follow federal law. It must give you validation information about the debt, either in its first communication or within five days, including who the creditor is, the amount and how to dispute it. The CFPB has tips on telling real collectors from scammers.
Real collectors also can’t threaten arrest, lie about the amount you owe, or pretend to be lawyers or government officials. Read your rights when a debt collector calls.
How to check a debt
- Don’t confirm or pay anything on the call. Ask for the caller’s name, company, mailing address and phone number.
- Ask for the validation notice in writing. A real collector will send it. See how to ask a debt collector to prove a debt.
- Look up the original creditor yourself, using a statement or the company’s official website, not a number the caller gives you. Ask whether the account was sent to a collector, and which one.
- Check your credit reports at AnnualCreditReport.com for the debt.
- Check whether the collection agency is licensed in your state, if your state requires it. Your state attorney general or financial regulator can help.
If you already paid a scammer
- Contact your bank or card company right away and ask to stop or reverse the payment.
- If you paid with a gift card, contact the card company immediately and keep the card and receipt.
- If you shared your Social Security number or account details, visit IdentityTheft.gov for steps to protect yourself.
- Watch your credit reports for accounts you didn’t open. A credit freeze can block new accounts in your name.
Report it
- Report fake collectors to the FTC at ReportFraud.ftc.gov.
- Submit a complaint to the CFPB.
- Tell your state attorney general.
Reports help law enforcement track and shut down these schemes.
The bottom line
Real debt collectors can be persistent, but they have to put things in writing and follow the law. If a caller won’t send details, threatens arrest or wants an unusual payment, hang up and check the debt yourself. Never pay a debt you haven’t verified.
Sources: FTC: fake and abusive debt collectors · CFPB: how to tell if a debt collector is legitimate or a scam · FTC: debt collection FAQs