Getting a call, text or email saying you owe money can be stressful, especially when the person contacting you demands immediate payment or threatens serious consequences if you don’t comply. That’s exactly the reaction scammers want.
Debt collection scams often involve fraudsters pretending to represent legitimate collection or government agencies, or lenders. They may claim you owe a debt that doesn’t exist, exaggerate the amount you owe, or try to collect information they can use for identity theft. The Office of the Comptroller of the Currency (OCC) warns that these scammers often rely on threats and intimidation to pressure consumers into paying before they have time to ask questions.
A call about a debt doesn’t automatically mean it’s a scam. But before you pay or share personal information, take a few steps to verify who’s contacting you and whether the debt is legitimate.
Red Flag #1: You Don’t Recognize the Debt
Don’t assume you simply forgot about it. Ask for the creditor’s name, the amount owed and how you can dispute it. A legitimate collector generally must provide this validation information during the initial communication or within five days. Don’t share additional personal details just because the caller already knows your name or address, scammers often gather that information from data breaches or social media.
Red Flag #2: They Threaten to Have You Arrested
Scammers often create urgency by claiming police are on the way, a warrant will be issued, or you’ll be arrested if you don’t pay immediately. That’s a major warning sign. The OCC identifies threats involving arrest, lawsuits, or immediate wage garnishment as common tactics used in debt collection fraud. Federal law prohibits legitimate collectors from using abusive or deceptive practices to collect a debt.
Red Flag #3: They Won’t Give You Details in Writing
A legitimate collection process should come with information you can review. If a caller refuses to provide validation information, becomes evasive, or claims you aren’t entitled to documentation, stop the conversation. If you receive validation information and believe the debt isn’t yours, you generally have 30 days to dispute it in writing, and the collector must stop collection activity until they have a response. Keep copies of letters, emails and notes from any phone conversations.
Red Flag #4: They Demand an Unusual Form of Payment
Be especially cautious if someone insists you pay using gift cards, person to person payments (aka: Zelle, Venmo), prepaid cards, or wire transfers. The OCC identifies these payment demands as a common warning sign, since scammers prefer methods that are difficult to reverse or trace. Do not pay via these payment methods.
Red Flag #5: They Ask for Sensitive Information You Weren’t Expecting to Provide
Never give an unsolicited caller your Social Security Number, online banking password, PIN or other sensitive financial information, even if they claim they need it to “verify your identity.” Look up the company using a trusted source rather than a number or link the caller provides, or contact a creditor you recognize directly using information from a past statement or its official website.
Before You Pay, Slow Down and Verify
Scammers count on creating panic. Giving yourself time to verify the situation can be one of your strongest defenses. If someone contacts you about a debt:
- Ask who is calling. Get the collector’s name, company name and contact information.
- Ask for validation information. Review the creditor’s name, amount owed and your right to dispute the debt.
- Check your own records. Compare the claim with statements, payment records and your credit report.
- Contact the original creditor when appropriate. Ask whether the account was sent or sold to the collection agency.
- Don’t pay because of a threat. Take time to determine whether the request is legitimate.
- Keep records. Save letters, emails, texts and notes in case you need to dispute the debt or report it.
What About Companies Offering to “Erase” Your Debt?
Fake debt collectors aren’t the only debt-related scam to watch out for. The Federal Trade Commission warns consumers to be skeptical of companies that guarantee they’ll settle all of your debt or promise fast loan forgiveness, especially if they demand payment before providing service. Research an organization and understand its fees before enrolling, and consider speaking with a reputable credit counseling organization if you’re exploring debt relief options.
What to Do if You Suspect a Debt Collection Scam
Don’t send money or share additional personal information. You can report suspected debt collection fraud to the Federal Trade Commission, the Consumer Financial Protection Bureau or your state’s attorney general. If you already shared banking or account information with a suspected scammer, contact your financial institution right away.
Protect Your Information and Your Finances
A demand for money can feel urgent, but you don’t have to make a financial decision on someone else’s timeline.
- Pause.
- Ask questions.
- Verify the debt.
- Confirm who you’re dealing with before sharing information or making a payment.
First Financial offers additional resources to help members recognize scams, prevent identity theft and protect their financial information. Visit our First Scoop Blog for the latest on scams targeting consumers.
If you believe information associated with one of your First Financial accounts has been compromised or you notice suspicious account activity, contact First Financial directly at 732.312.1500.
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