Debt collection scams: What they are, why they happen, and how to avoid them

Over the last few years, the number of businesses that use a professional debt collection service has more than doubled. We see this as a positive sign – businesses are becoming more proactive in reclaiming money owed to them, which can only be a good thing for the economy.

But along with this surge in popularity, the market has also seen the surge of something else – debt collection scams. Today, we’re going to tell you what a debt collection scam is, why they exist, and how to stop yourself falling for one.

Debt Collection Scams

Companies often hire the services of a debt collection agency to help collect overdue accounts. Many debt collection agencies are legit, but there are also scam debt collectors. Scammers are rife, and they try their best to pose as real debt collection agencies and convince you to part with the money you owe. But instead of paying off your debts, you’re just lining a scammer`s pocket. So as a business owner you need to be well informed, so that you can protect yourself and even your business from scammers.

Debt collection scammers get your information without consent. Often, scammers use tactics that brand them to be legit. They will convince you that they are from the companies whom you owe money, and they will request cash as payment, or give you separate bank details from the ones you are used to paying in to. They use your genuine information to convince you that they are the real thing, and use an enticing language to collect money from you quickly.

Identifying Legit Debt Collectors

The first thing you can do to identify if a debt collector is real is by looking them up. A legit debt collection agency will be searchable online and has a valid website. The contact information should not be hidden, and is should be accurate. For example, if you Google ‘Debtcol Debt Collection’, you will find our website, and all of our information in the open. But if we were a scam agency, we wouldn’t be open about our contact information, and we probably wouldn’t even have a website (or if they did it would be shockingly poor quality). So, before you start giving out your account details, it is imperative that you take a minute to carry a background check on any debt collector that makes contact. Make sure you ask the caller:

• The name of the individual collector you’re speaking to.
• Their physical address.
• Their company name (preferably a few times in the conversation, to see if they give the same name each time)
• Their company number and any licence number.
• Enquire about the origin of the debt, amount and name of the creditor.
• If the debt collector can offer such information in a consistent and accurate way, and you’ve looked them up online, then it is most likely a legit service.

How To Avoid A Debt Collection Scam

Often, the tricks used by scammers can be hard to identify straight away. Therefore, you need to be aware of the tell-tale signs to help you steer clear of giving your money to a debt collection scam. Beware of;

• Callers who insist on instant payments through untraceable methods.
• Debt collectors who insist on collecting your personal details – because a credible company will always your details as part of the debt they have been instructed to collect.
• Avoid collectors that do not provide any direct information about the creditor they represent. Keep in mind that a legitimate company will usually notify you if it has instructed a debt collector.
• The creditor is not known to you and cannot be contacted.
• If you are threatened with a criminal charge if you refuse to pay. This is because debt collection companies are not allowed to issue such threats on behalf of a creditor, but scammers will try this to scare you into paying.

It’s also worth making sure that, before you make any payment to a debt collection agency, have all their background information and that of the company they are representing. Do your due diligence, and make sure it is a legitimate debt collection agency and a legitimate debt. Ensure it is the real company you owe money to. Note that once you make payment, it can be hard to trace scam companies, and this is usually a long and distressing process. Plus, it won’t eliminate your original debt, and you will still be liable for it (if it exists).

In order to protect yourself from being conned, you need to be aware that scammers are out there, and they very rarely have morals. Remember, scammers are experienced, and they understand perfectly well how to make a scam appear to be true. If you would like more information on how to identify scam debt collectors, or you have a question about the debt collection process, we would love to help. Just get in touch with us today for your free consultation.