As Philadelphia bankruptcy attorneys we meet people who are in over their heads with bad debt every day. Some of them face calls from legitimate debt collectors.
But some are also being hounded by fraudulent debt collectors. Debtors who are hounded by calls every day sometimes have trouble telling the difference, and could wind up paying people they don’t even owe.
It’s not a good idea to wait too long to seek financial relief through bankruptcy just because waiting can leave you vulnerable to these kinds of scams. But here’s what you need to know to protect yourself, information you can use any time a supposed debt collector calls you, even after your financial fresh start.
How Scammers Make Up Debts
Often, scammers buy and sell bits of people’s personal information all over the dark web. Once they have enough information to sound legitimate they start making phone calls.
The scam works even better when it sounds like a debt you could owe. For example, one wide-reaching payday loan scam involved an individual who sold information on anyone who had ever taken out a payday loan. He paid to manipulate a database of 8 million payday loan applications, created made-up lenders, wrote in that everyone owed $300 and sold phony debt portfolios to third-party collectors across the nation, as well as to unscrupulous individuals who knew the debts were fake but were willing to try collecting on them anyway. If you’d taken out a payday loan in the past you could easily find yourself questioning whether you’d actually paid off the whole thing.
Couple that with the frightening tactics many scammers use and it’s easy to see why some people end up falling victim to these scams.
Keep Good Records
If you’ve let your records get out of control prior to your bankruptcy this task will at least be easier after. If you know exactly what you owe, and to whom, it’s harder to hit you with a demand to pay a made-up debt.
You should also be pulling your credit report every year. If a debt isn’t on your credit report it’s unlikely you owe it. You can get a report for free each year at AnnualCreditReport.com, the only official site directed by the Federal government to provide them. Don’t go to other sites, as you will end up paying money you don’t need to pay just to get your hands on your credit report.
Ask the Right Questions
A real debt collector with a legitimate debt will be able to provide you with the name, address, and phone number of their agency. You can then request a validation notice. If you can’t get them to provide you with this basic information or never receive a letter chances are you could be dealing with a debt collection scam.
While you’re at it, Google the phone number. If no website pops up you could easily be speaking to a scammer speaking into a burner phone.
See also: 7 Things You Should Never Do When a Debt Goes to Collections.
Know Your Rights
Phony debt collectors often show their hand by violating the Fair Debt Collection Practices Act. They use aggressive tactics like threats of physical violence, jail threats, and more to pressure you into paying the debt.
Real debt collectors won’t do that, because they can be brought to court and held liable for the abuse.
See also: What Philadelphia Residents Should Know About the FDCPA.
Never Pay Via Wire Transfer
Wire transfer is one of the most common ways a scammer will demand payment. It’s untraceable and it puts cash in their hands right away. Once you wire the money you can’t get it back.
Pay via a credit card who can at least reverse the transaction if it proves to be fraudulent. Or don’t pay at all, especially since you might merely be dealing with zombie debt, not a scam. If you’re dealing with zombie debt paying even a single cent could restart the statute of limitations on that debt.
Don’t Keep Drowning
You’re at your most vulnerable when you’re drowning in debt. If you’re in so much financial trouble you can’t make heads or tails out of all the calls you’re receiving anymore it’s time to get help.
Contact the law offices of Sadek Bankruptcy Law Offices today for a free consultation.