Fraud-fighting organizations are reporting a new trend in debt-collection scams, in which fraudsters not only try to pressure people into forking over money they don’t owe but also harass targets’ family members and friends. Scammers rely on the social pressure and fear of job loss to get the victims to pay, according to a summary of consumer complaints to Fraud.org.
Many consumers don’t know their debt collection rights (here are the essential rights you need to know), which clearly state a debt collector is not allowed to disclose details of the debt to someone other than the debtor. Even in the cases of legitimate debts and rogue debt collectors using illegal practices to pressure consumers, people shouldn’t pay as a result of such collection attempts. Not only may it be a scam, it’s a violation of their rights.
This trend isn’t trivial: Scam victims suffered losses averaging $1,748.39 between October 2013 and June 2014, and these consumers are often in bad situations before fraudsters start pestering them. Scammers sometimes acquire a consumer’s home and work information from bogus payday loan applications, and if someone has been successfully duped before, fraudsters may try to sell their information to other aspiring criminals. These so-called sucker lists may subject victims to repeated fraud attempts, which is unpleasant enough without the added stress of harassing phone calls to others.
Anyone who has been a victim of debt-collection fraud should alert friends, family and co-workers so any debt-collection calls pertaining to that person are clearly identified as scam attempts. Most important: You should confirm the legitimacy of a collections account before paying (here are tips on the verification process), and never provide payment information to a debt collector over the phone. You can check your credit reports for free once a year to see if you have any collections accounts that you need to pay, and you can also get an idea of how collections accounts may be impacting your credit scores on Credit.com for free.
Fraud.org also warns against applying for payday loans online, due to the risk of exposing your personal information but also because online payday loans often carry higher fees and rates than loans acquired offline.
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