The BBB urges consumers to not be intimidated or pressured into paying a phony debt collector. If you owe money or if you are behind on bills, you may be contacted by legitimate debt collectors. However, the BBB assists callers daily who report that phony debt collectors have contacted them. This scam often involves a caller who refuses to provide contact information and uses threatening tactics to convince innocent victims to pay immediately or risk being arrested.
“Consumers need to be aware of the best practices for handling debt collectors,” says Jay Sheppard, Dispute Resolution Director for the Better Business Bureau Serving Southeast Texas.
It’s important to verify the alleged debt before taking action. BBB recommends doing the following:
Verify the legitimacy. Get the debt collector's name and contact information to research the agency further. Search the Internet to see if they have a website or a BBB Business Review at www.bbb.org. Verify that the representative who called is affiliated with the agency.
Request written proof. Get documentation to help determine if the callers are actually identity thieves or if a debt is actually owed. By law, a debt collection agency must provide a validation notice within five days of contacting you about the debt. Within 30 days of receiving their validation notice, send the debt collector a written request to further verify the debt details. Do not provide personal or financial information unless the validity of the debt and the debt collector has been confirmed.
Avoid phony calls. Be wary if the debt cannot be verified or if no documentation is received. Advise them to stop contacting you and register with the National Do Not Call Registry at www.DoNotCall.gov or 888-382-1222.
If you do not owe the alleged debt, BBB recommends doing the following:
Don't pay. Do not claim a debt that isn't yours or make a payment on a bill just to make the collector "go away." Even just one payment can indicate that you are accepting the full responsibility of the debt. The invalid debt could also reflect as a liability on your credit report.
Contest errors. If no debt is confirmed, contact any involved parties to clear up inaccuracies on your credit report, such as: the debt collector; the creditor or company claiming unresolved accounts; and the major credit bureaus. Write a detailed letter and include supporting documents to prove your case. The Federal Trade Commission provides additional resources for reporting errors.
Check for identity theft. If contacted by a collection agency regarding erroneous bills or debts, it could be an indication of identity theft; an imposter may be using your identity to make purchases, open accounts and obtain credit. Review your credit report to quickly identify fraudulent activity or make corrections; visit www.annualcreditreport.com for a free yearly credit report and get FTC advice for Resolving Specific Identity Theft Problems relating to debt collectors.
BBB recommends doing the following for debt you do owe:
Know your responsibilities. It is not against the law for a debt collector or creditor to contact you regarding unpaid debts. Try working with them to resolve issues. Discuss doing payment plan and request obligations in writing.
Complain about abusive practices. Report harassment, threats and other violations of federal telemarketing laws to the FTC. File a BBB complaint if you believe a debt collector is acting unethically. Also, research state laws on debt collectors, which may vary.
Stop collector calls. According to federal law, a debt collector cannot continue to contact you—at work or home—if you tell them to stop. Write a letter stating not to contact you anymore. Save a copy of the letter then send the original via certified mail and request a return receipt. If a debt is owed, the collector or creditor can still take legal action to collect funds and may contact you to inform you of their action.
Seek help for debt. Try using BBB's free online program Managing Credit – Made Simpler.
Know your rights. Review the federal Fair Debt Collection Practices Act (FDCPA), which sets standards for collection agencies and prohibits abusive tactics. The FDCPA is enforced by the FTC and violations should be reported. Debt collectors:
- May not make false or deceptive claims.
- Are not allowed to make idle threats, express or implied, or use abusive or profane language.
- Should not discuss consumers' accounts with unauthorized third parties.
- May not inaccurately report credit information and pressure consumers to pay debts they do not owe.
- Must investigate the validity of a dispute over a debt.
Report Scams: Debt collection victims can file complaints with the:
- Better Business Bureau
- Federal Trade Commission.
- Internet Crime Complaint Center, if contacted by internet or e-mail.
- State Attorney General's Office and other local consumer affairs agencies.
- American Collectors Association (ACA International) processes complaints on its member debt collectors; find out if the debt collection agency is a member.
For more information on debt collection, visit www.bbb.org/us/Consumer-Tips/. In Southeast Texas, call 409/835-5348 or 855/BBB-SETX.