The Better Business Bureau (BBB) recently warned consumers to beware of a new debt collection con where scammers pose as debt collectors who claim to be collecting on cash advances.
Here is how the scam works:
You receive an automated call from a company claiming to be collecting a payment for a cash advance. Next, the recording will prompt you to stay on the line and speak with an agent.
If you stay on the line, the agent will request that you pay your debt immediately using a wire transfer or a prepaid debt card. If you refuse, the agent will use threats of arrest, lawsuits or garnished wages to intimidate you.
Keep in mind that the use of threats in debt collection is in violation of your rights as a consumer under the Fair Debt Collection Practices Act.
If you receive one of these calls, the BBB suggests you do the following:
- Just hang up. If you don’t have any outstanding loans, hang up.
- Get an official notice. Ask the debt collector to provide an official “validation notice” of the debt. In the US and most of Canada, debt collectors are required by law to provide the information in writing. The notice must include the amount of the debt, the name of the creditor and a statement of your rights.
- Confirm the agency is real. Ask the caller for his/her name, company, street address and telephone number.
- Do not provide any information they do not have. Until you have verified the call, do not provide or confirm a bank account, credit card number or any other personal information.
- Check your credit report. If you are unsure if you have outstanding debt, check your credit report with one of the three national credit reporting companies: Equifax, TransUnion or Experian.
- Place a fraud alert on your credit report. If the scammer has personal information, alert the three credit reporting companies that you have been contacted.
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