They're Here! Debt Collection Cons and Scams!

My son received a call last week from a "debt collection agency", regarding a credit card debt he knew had been paid off two years ago. They seemed to have all the correct info on the debt, and were not heavy handed but rather gently very persuasive. They kept calling, worrying him that maybe something had happened and that the debt hadn't gotten paid or recorded as paid somehow.

They said he needed to send them a payment now, and they would pay the cc company. He checked with the cc company--no debt. He then went online and found out that this company had a website. He called their number and told them he had no debt and to quit calling. They did.

With all the financial stress many people are under these days, these con artists are preying on the vulnerable. This time a young person, but the next victim could be a parent or grandparent.

Sorry, I don't have the name of the company. I know this one was in California. I'll bet, though, that more of this type of scam will appear. If you suspect a scam, search online to see if there is a number to call them. My son also found online a list of complaints against this company.

We may be losing jobs and money these days, but we shouldn't be losing sleep over cons like this. Heads up.

Sadly, this is nothing new. Shady debt collectors have been doing this for years if not decades. Read up on the Fair Debt Collection Practices Act. Your son did exactly the right thing - call the cons and make them prove you owe what they say you owe. Tell them to only communicate with you in writing. If you do this and they persist in calling you, you can sue them and get paid under the FDCPA.

We also get these calls and even letters in the mail all the time. Fishing for "free money" as I call it.

Every time my husband gets a call, he calls me in a panic. I tell him to relax, don't give them any information. One of these Companies is using the name of a local Credit Union here, and when my husband got the message he was freaking out about it.

It seems that they are hovering vultures these days, trying to trick people into handing over wads of money to them.

Tell your son that he did a great job, and keep up the good work of watching out for himself.

A_L

Originally posted by desert
My son received a call last week from a "debt collection agency", regarding a credit card debt he knew had been paid off two years ago. They seemed to have all the correct info on the debt, and were not heavy handed but rather gently very persuasive. They kept calling, worrying him that maybe something had happened and that the debt hadn't gotten paid or recorded as paid somehow.

They said he needed to send them a payment now, and they would pay the cc company. He checked with the cc company--no debt. He then went online and found out that this company had a website. He called their number and told them he had no debt and to quit calling. They did.

With all the financial stress many people are under these days, these con artists are preying on the vulnerable. This time a young person, but the next victim could be a parent or grandparent.

Sorry, I don't have the name of the company. I know this one was in California. I'll bet, though, that more of this type of scam will appear. If you suspect a scam, search online to see if there is a number to call them. My son also found online a list of complaints against this company.

We may be losing jobs and money these days, but we shouldn't be losing sleep over cons like this. Heads up.

Lets clear up a few things.

1. Your debt is sold to these collectors often for pennies on the dollar, they then charge you full price, for something they paid pennies on the dollar for. Thats not too fair.

2. Collectors often will use heavy language and make it sound like your life will be over if you don't pay them.

3. Never talk to these collectors on the phone, ask them to correspond ONLY in writing, they MUST comply with this request, the Business Practices Act spells this out, and they MUST comply.



Now, what can you do when you have a collector sending you letters? This is the point where you ask them for the ORIGINAL contract signed by you and the original company in which they CLAIM you owe.

Most often this alone is enough to stop the bombardment as in most cases these debts are created out of thin air, if you have been a deliquent on your cell phone bill this trick isnt going to work cause you did sign a contract and your hooped.

Second, is that you require the collection agency to send you a PROPER bill, as per the Bill of Exchange Act, which is SIGNED by an authorized representative.

Anyone who has ever received a collection letter will notice they send you a notice that says you owe $XXX.XX but its not signed.

THEY ARE BREAKING THE UCC AT THIS POINT AND YOU ARE NOT REQUIRED TO PAY THEM! IGNORANCE IS THE ONLY REASON EVERYONE DOES!

The Uniform Commercial Code (UCC)(3) Requires an order to pay be signed.

Additionally, U.C.C. 3-501(3) Without dishonoring the instrument, the party to whom presentment is made may return the instrument for lack of necessary endorsement.

So you can simple ask them to send you a PROPER BILL (order to pay) with a PROPER endorsement.

You send them notice of that via REGISTERED MAIL, give them 2 weeks to respond. If they do not respond tell them to stop corresponding with you permanently after that. Additionally, in your final letter state that ANY attempts by them to access your credit bureau or anything they file against your credit bureau MUST be removed. You can even take them to court for this because if they ruin your credit and cannot LEGALLY provide you with the proper documentation AFTER YOU REQUESTED then they are acting illegally.

I have used this method to have multiple accounts ZEROED and canceled with collection agencies. They simply cannot come up with the paperwork. And for everyone one person that uses this method to defeat them, they have 10000 that pay it without hesitation. Trust me, just like police they pray on the weak and ignorant.

[edit on 4-3-2009 by king9072]

reply to post by king9072


Good advice!

My question is...how would a legitimate debt collector try to collect on a debt that was paid off two YEARS prior?

Is the information given them by a major credit card business/bank so out of whack, that millions of people with past paid off debts will be harassed? This harassment would increase in these economic times!

How can they be working with such out-of-date info?

I have no problems with debt recovery businesses in general. What I have trouble with are businesses that say to send them the money on a debt that was paid off.

reply to post by another_lurker


Right on about these fishers, whether it's via internet, phone, or post office. These generic cold calls about "there may be trouble with your account/mortgage!" would be enough to cause the unsuspecting to race to the phone/respond to the bait just to be sold a service not needed, send money to a scam, etc.

Indeed, this has been around, and I can see the use of cons and scams increasing, affecting people who might not be aware of this "fishing" or having never had trouble with debt until now.

I don't want to take away from the advice given because it's good stuff. I merely wanted to point out one small thing.

Originally posted by king9072
1. Your debt is sold to these collectors often for pennies on the dollar, they then charge you full price, for something they paid pennies on the dollar for. Thats not too fair.

It might not be fair but it is business. If the collection companies bought the debt high and sold it low, that would be fair but they'd go out of business.

buy low, sell high is the method to make profits. you can't blame them for trying. Their other heavy handed tactics are deplorable but trying to make a profit by following one simple rule of investing should not be deemed unfair.

That's like saying it isn't fair if I buy citibank stock today and sell it in 5 years for $30 a share (I'm not suggesting this is even possible, just using it as an example).

Give these weasels and dirtbags this one thing. It's about the only thing they deserve, the acknowledgement that they are trying to operate under the first rule of investing.