"We are calling about your debt" - fake debt help agencies are there to steal your money not to help with financial hardship!

There are many people who receive fake debt calls every day. These callers often pretend to be representatives from legitimate organisations, but their only goal is to steal your money. They may say things like: "We are calling about your debt" or "we are calling from the Crown Prosecution Service" in order to trick you into thinking they are legitimate. They may know or may think that you owe money or have auto loans. Businesses and individuals in the UK loose hundreds of millions of pounds a year to fraud, most of it by scammers posing as debt collectors.

In this article we will try to advise you on what to do if you fall victim to such a scam and how to avoid scams.

What are debt collection scams?

There are many fake debt collection agencies out there that are simply trying to steal your money.

These agencies do not care about helping people with financial hardship; they only want your money. Be very careful if you are ever contacted by one of these fake agencies, and do not give them any personal information or money.

If you are in debt and need help, there are many legitimate organizations that can assist you. Do your research before working with any organisation, and make sure you know exactly what you're getting into.

What to do if you receive a call from fake debt collectors?

If you receive a scam debt call, do not panic. Hang up the phone immediately and do not give the caller any sensitive information. They may ask you about your bank account, financial information, personal details or address. Never give them any. If they already have some of your details, do not give them any more.

If, for any reason, you have already given them your personal information and believe you have been a victim of identity fraud, contact your local police department and file a report.

Who are the legitimate debt collectors?

A legitimate debt collection agency is a person or company that is hired by your original creditor to collect outstanding debts. There are many legitimate organisations and companies that will help you deal with this problem. If you are in debt, it is not too late to cope with it.

However, be very careful when working with any organisation regarding your debt, and make sure you know exactly what you're getting into. There are many scams out there, but there are also many legitimate organisations that can help you get out of debt. Do your research and only work with reputable organisations in order to avoid becoming a victim of a scam.

What is collection company actually doing?

Legitimate debt collection agency is regulated by law, which protects consumers from unfair and abusive practices. In the United Kingdom, debt collectors are regulated by the Financial Conduct Authority (FCA).

Debt collector or creditor cannot contact your family members or employer or provide information about the debt to third parties.

While they are allowed to contact consumers about outstanding debts, they cannot engage in unfair or abusive practices. For example, they cannot threaten violence, use obscene or profane language, or make repeated calls that are intended to harass or annoy the consumer.

Any debt collector who contacts you claiming you owe payment on a debt is required by law to tell you certain information about the debt.

 If you believe that a debt collector has engaged in unfair or abusive practices, you can file a complaint.

How you can verify fake debt calls?

First, ask for the name of the collection agency and the phone number. If the caller refuses to give you this information, it's likely a scam.

Next, ask for written verification of the debt. This should include how much you owe, who you owe it to and what steps to take if you believe you don't actually owe the debt. Once you have this information, you can verify that the debt is real by contacting the original creditor directly.

Finally, keep in mind that legitimate debt collectors are bound by certain laws governing their behavior. They cannot threaten or harass you, and they must respect your requests for information. If you believe you're being harassed or otherwise treated unfairly by a debt collector, you can file a complaint with the Consumer Financial Protection Bureau.

Common scams

Debt collections scams are very common these days. Fake credit card companies can get all your personal info and will push you to pay your bills quickly with the help of the phone. Other frauds can be more complicated to detect. Scammers may access your credit reports and call you claiming that they are representing a debtor collection agency and that you owe them money for unauthorized expenses. They may intimidate you and impersonate certain people or institutions. Be careful!

How to spot a debt collection scam?

Debt collector agencies are subject to controls and must comply with a number of rules in order to operate legally.

You should get warning signs in some of the situations.

If someone calls and starts asking you things like personal details, bank account, pay slips, PIN number, passport or driving licence, start being suspicious. Doing so could put you at risk for identity theft or let a scammer pull money from your accounts. Legitimate debt collectors doesn't need to ask you this, as they already have all this information. The very fact that they call proves that they know everything they should about you and your debt. They do not need to ask for additional information. If you hear this type of questions, definitely do not continue and report this phone number.

Very often you may be told that you will go to prison for old debts if you do not settle them as soon as possible. These aggressive tactics are common techniques to make you feel afraid. Remember that legitimate collection agency will never do this. They can make you aware of the consequences if you do not settle your debts, but they won't scare or threaten you.

Fraudsters very often ask for a wire transfer via e.g. Western Union. This is extremely suspicious and legitimate agencies would never ask for this.

It is also increasingly common to hear of situations in which fake debt collector will try to convince you into making the immediate payment, even while still on the phone. These are quite common scams. Remember, such companies work on your emotions. They may say that if you don't pay and don't make a money transfer now, they will charge you huge interest or send representatives to your property. Most commonly scammers will also try to threaten unsuspecting victims with jail time to encourage them to pay. Even if you refuse to make a bank transfer, they can inform you that they accept payment by cheque, quick payment, card payment, wire transfer, etc. They will press for it. Be vigilant and never do this.

Fake debt collectors usually call from various phone numbers, often from restricted ones or they use unknown number. Even if you want to check their veracity, you will not find them on the Internet. Every legitimate company has a website with their address and contact details.

What you can do not to be cheated by fake debt collector?

Above all, the best advice is to be cautious and treat every such phone call as a scam in advance, even if it is not. It is better to check any such information.

Fake debt collectors operate in a similar pattern.

Do not make any payments

First of all, you may get repeated phone calls, very often in unusual time like evenings, weekends or Bank Holidays. Sometimes from one number but very often from a different one each time. Even if you try to block one, they will call from another.

A legitimate debt collector will never ask you for repayment on the first call; they will certainly discuss all the options with you and give you time to think about it. If you are asked to do so, you can be sure it is one of the debt collection scams.

Ask questions

If you are not sure who is calling, ask directly for the company name and address as well as the name of the caller. Debt collectors are required by law to provide you with this information. If you can get this, make a note of it and then check it very carefully on the Internet. If the company is legitimate, you will easily find all the information.

Ask them what amount you owe and who is your creditor. You can also ask for a validation letter or confirmation about the debt. Remember that almost every time they will try to use scare tactics. If you are not sure how much you still have to pay back, ask for free credit report.

Contact your creditor

Every time you receive a letter, text messages or phone call, check with your lender or bank. They will know to whom they have shared information about your debt. If they are approached by a legitimate company, they can easily give you the name of the company and all its contact details.

How to cooperate with legitimate debt collector and be debt free?

Debt can be a difficult thing to deal with. It can feel like you're never going to escape from under it. But there are things you can do to make it more manageable and reduce the amount of stress it causes. Start by counting all your debts. It is very important to be aware of how much money you owe. You can confirm your debt by checking your credit report.

Next, check all your income and any additional resources you might have.

The next step is to make a list of all your expenses, bills, fees. Write out even the smallest amount. Think about which expenses you can do without and which you can reduce. Talk to your bank or lender. They also want you to repay your debt on time and may be able to offer you more convenient terms.

And most importantly, do not take out another loan. Remember that debt is a serious problem, take it seriously and do everything you can to pay it off as soon as possible. Beware, if you do owe criminal fines, it is possible that failure to pay may result in your arrest.

If you need any advice you can also speak to National Association of Citizens Advice Bureaux. They will assist you out with your financial decisions and may help you revise your financial products.

Finally, work out your repayment plan - either with or without the debt collector's advice. It is a good idea to talk to them as they have valuable experience which will enable you to deal with the problem more quickly.

How to report fake debt collectors?

In the first instance call the police and report the crime. Scammers do not go unpunished, and you have the right to take the legal action against them. You should report all types of scams to Action Fraud, the UK's national reporting centre for fraud. Their telephone number is 0300 123 2040.

What should you do if you are victim of a debt collection scam?

If you have reported the fraud to the police, the next step is to contact your creditor and inform them of the whole incident. Many organisations offer support in the event of fraud. Contact your local Citizen Advice centre as they will advise you where else to go for help and where it is worth reporting the crime.

Summary

We will once again highlight that the most important thing is to be attentive. Not all debt collectors are scammers. Most of these are legitimate companies, although there are also many fraudsters who prey on your ignorance. There are lots of signs of a debt collection scams, which we described in this article.

Remember, that if you owe money, you might get calls from debt collection agencies. Always be suspicious. If you don't know the phone number - check it.

If you are unsure who is calling never give any information about the debt or your personal details. Do not pay immediately, and do not make any money transfers. Identity theft is a very common cause of debt collection fraud.

Always give yourself a time and never rush when making financial decisions. Try to have the up to date credit reports - to check if what the debt the collector is referring to is indeed on your report. If you're struggling to cope with debt, don't be afraid to ask for help. There are a number of people and organizations that can assist you. There are counseling services that can help you create a budget and work out a repayment plan. You don't have to go through this alone. With the right resources and support, you can get out from under your debt and start fresh.