Debt Collection Scams – What You Need To Know

No one likes the idea of being scammed. But sadly, criminals will always look for ways to make a quick buck, and scamming hard-working business owners have become a very popular target for them. Stealing data, selling it on the black market, or buying that data to enact scams are some of the main cyber threats businesses deal with on a daily basis.

Debt collection scams have become a common staple in the criminal’s arsenal, as busy business owners with a lot going on are less likely to be vigilant about their details. Especially if they’re used to paying invoices or dealing with credit. With the rate of debt collection scams rising, we wanted to share some information and advice about what they are, how to spot them, and how to avoid them.

What Is A Debt Collection Scam?

A debt collection scam is when a criminal (or several criminals acting together) tries to intimidate you into paying them money. They will do this by pretending to be a collections agency, saying they are working for a company you have bought from, and demanding you pay them immediately for a non-existent debt. This will usually happen over the phone, and they will put an immense amount of pressure on to get you to panic and pay.

Common Signs Of A Scam

Thankfully, there are some telltale signs that a debt collector might actually be a scammer. A few things to look out for include:

Repeating Information: If the person calling you is asking for information they should already have, then this is a big red flag. Debt collection agencies all have a CRM system in place to help them track collections and manage customer data, which means they should already know basic information like your name, company name, business information, invoice numbers and purchase numbers. If they’re asking you for this basic information, don’t give out any of your private data.

Avoid Giving Details: If you start to question the person on the phone and they clam up, it’s another big red flag. Scammers are very like politicians – skilled at not answering a question, but making you think that they have. If they avoid giving you any information about themselves or their company, you should do the same.

No Online Links: If they do provide you with a phone number, the first thing you should do is Google it. Any genuine debt collection agency will have their phone number linked to their website, and a simple search will bring that up, along with a digital footprint for that business. If it doesn’t, then it’s probably a scam. In fact, you might even find the number turning up on watchdog sites flagged as dangerous, so this step is always worth following.

Lots Of Pressure: If they’re piling on the pressure or issuing threats, it’s time to put the phone down. Legitimate debt collection agencies aren’t allowed to issue threats, or intimidate you into paying, and since the penalties are large fines or prison time, you know they aren’t on the up and up.

Payment Methods: If they’re asking to be paid by wire transfer, bitcoin, or any other payment method that’s quick and untraceable, then this is a bad sign. Reputable agencies will offer multiple payment options like BACS or CHAPS to provide secure and traceable payment. They will never offer, let alone push, wire transfers or bitcoin.

Phone Contact Only: If the only way they contact you is by telephone, they are also likely a scammer. Debt collection agencies will contact you by telephone yes, but they will also send emails and physical letters, especially if they may need to go on to court proceedings. In fact, you will usually get an email or a letter before the phone calls start!

The Rise In ‘Write-Off’ Scams

Over the last few years there has been a significant rise in the number of scammers offering to ‘write off’ debts, targeting both consumers and business owners. The FCA warned that there were a significant number of illegitimate companies offering unauthorised claims management services, saying that they can write off debts, charging a fee to do so even if the service fails. In fact, many were intentionally letting the schemes fail and charging further feeds to ‘fix’ it, leading to significant losses for all who are involved. Especially since if you use an unauthorised firm you will not have access to protections like the Financial Ombudsman service. The same tips apply to these services, especially if you were not actively looking to consolidate or write off any debts.

Identifying A Legitimate Debt Collector

One of the best ways to figure out if a debt collection agency is legitimate is by looking them up online. A real debt collection agency will have a website and a strong presence online. Their contact information isn’t hidden, and they will look like a proper business. If you look up the agency and they don’t have a website, or it’s incredibly poor quality, then it’s worth being cautious. A scammer will also be very reluctant to give you any information. So if someone has called you demanding payment, ask them:

• The name of the person you’re speaking to
• Their physical address
• Their company name (try to ask this a few times during the conversation, to see if they give the same answer each time)
• Their company number
• About a written validation notice containing your personal information
• The origin of the debt, amount and the name of the creditor

If the person you’re speaking to can provide this information in a consistent and accurate way, and their online presence seems genuine, then you are likely dealing with a legitimate company.

At Debtcol we are always happy for you to verify that we are who we say we are. We have a full commercial website (complete with records of our phone numbers and phone calls), only do payments by BACS and other approved methods, we never ask for information we already have, and are happy to have things in writing. In fact, sometimes we insist on it! And if you’re ever in doubt, you can always contact the Consumer Financial Protection Bureau and ask for their advice.

If you would like to know more about our debt collection services, or have questions about a service you have used before, please just get in touch with the team today to book your free consultation.