Scams are everywhere, especially when it comes to debt collection. Many times, a debt collection scam will even try to get you to pay on a debt you do not owe. It helps to know what red flags to look for to avoid becoming the next victim of a debt collection scam.
One of the reasons why debt collection scams are so dangerous is that they take advantage of someone when they are at their weakest. These scammers are aware that the person they are calling is already in a difficult financial situation, and can be easily taken advantage of.
For the most part, these types of scams play out in the same manner. The scammer contacts a person and tells him or her that they are calling on behalf of a collection agency, law firm or other government agency and that they are reaching out to collect on an overdue debt. If the caller refuses to comply, the scammer then makes threats of wage garnishment, telling their friends, family or employer of the outstanding debt, even threatening arrest and jail time. If the person answering the phone is savvy enough to know that no company can legally do these things, the threats will have no effect. However, many times, the person answering the phone plays right into the scammer’s hands.
If you are on the receiving end of one of these calls, you need to know your rights. The first of these is the right to receive written confirmation of the debt. Under U.S. law, debt collectors are required to provide a written validation notice of any debt, when requested. In this notice, the collector must include the amount owed, the name of the original creditor, and a statement of the person’s rights. If a debt collector refuses to provide this information, this refusal is a red flag that the call is a scam.
If you have any suspicions that the caller is not legitimate, do your research. Make sure the caller is real by asking for the company’s name, telephone number and street address. Never provide credit card information or bank account information over the phone. If the collector is legitimate, the company will likely have all this information already. Also, if the collector asks for payment through PayPal or other electronic transfer, this is another red flag that the call involves a scam.
More recent scams have attempted to collect on debt that is past the statute of limitations. You may have owed this debt at one point in time, but after a certain length of time has passed, the debt is no longer legally collectible. However, scammers hope that the caller does not know this fact and will make payment, thereby ‘re-activating’ the debt. For personal loans, the statute of limitations in Florida is five years, while oral contracts and revolving accounts, such as credit cards, the statute of limitations is four years. The written verification provided for the debt should allow you to confirm whether the debt is past the statute of limitations.
If you see any of these red flags, hang up immediately. Do not give the person on the other end of the phone any information and report the call to the Federal Trade Commission or the Florida Attorney General’s Office. It also helps to know your rights under the Fair Debt Collections Practices Act (FDCPA), which makes it illegal for debt collectors to use abusive, deceptive, unfair or threatening practices when collecting on a debt.
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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.