How to spot a debt collection scam?

Do you know this feeling when you are about to spend an evening with family or friends, but persistent phone calls interfere with your meeting? Have you experienced feelings of anger, annoyance, shame, or even fear when the collectors attacked you with calls? If yes, then you've come to the right place.

Explore if you can avoid paying a debt to collectors, also read the important information on how to recognize scammers who pretend to be collectors and want to get your money.

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Of course, dealing with debt collectors is far from the most joyous task in your life. As a rule, these people are not at all aware that you have taken any steps in order to repay the loan, and they also do not care if you have money. All they want is to get money in any way.

Since calls from an unknown number, a bunch of emails, and conversations with debt collectors cause fear and anxiety in most people - you need to know what to do, how to behave, and how to answer them. Like all people, debt collectors have certain responsibilities and rights that they must respect when collecting a debt. Thus, you must know your rights and be able to properly communicate with such people. After reading this article, you can deal with debt collectors when you can't pay.

Dealing with debt collectors

Of course, you know that collecting any debt starts when you miss payments. Typically, these are loans of various types, cellphone bill, medical bill and other services when you have to pay back the debt. So, if you have not paid your debts for some period of time, about 3 months, many companies end your account to collections in order to get your money back. So companies either sell your debt to a collection agency or hire an agency to offer you a "good deal".

All collectors have the same goal - to get the money you owe. Of course, you know that if you owe money, you have to give it back, but often the methods used by the collectors go beyond the law. Some of them use threats, insults and other forms of indecent behavior to get you to pay your debts. Thus, it is important to know what to do and how to behave.

How to Deal With Debt Collectors When You Can't Pay?

If you do not repay the debt on time, you are probably in a very difficult financial situation and barely making ends meet. Of course, the situation is exacerbated when the collectors intimidate and threaten you. However, it is important to understand that even when you are being persecuted, you need to leave your little savings in order to take care of your family. However, what can be done in such a situation?

Remember the four walls

You will probably be aware of this, since many articles mention four walls, but not all people pay due attention to this. Four walls are the first thing you should care about, your most important spending. These include:

  • Food (since you and your family need to eat to survive, so it's important that you have the money to pay for basics)
  • Utilities (it's also important to ensure that you have water and light at home, otherwise it will be more difficult for you to make ends meet)
  • Shelter (of course, you need to have money in order to pay rent and have housing)
  • Transportation (since you need to go to work, take children to school, etc.)

So four walls is something it is almost impossible to exist now, so this is what you need to take care of first of all. However, many collectors will try to prove that they are the first to whom you have to pay, sometimes using blackmail and intimidation. However, before giving them all your money, remember two things: your rights and your debts.

Rights and debts

Knowing your rights will help you understand if collection agency representatives are acting within the law. As a rule, many of them disregard the rules and try to charge money by any means. However, there is the Fair Debt Collection Practices Act to help you understand if they are operating within the law. We'll come back to this in more detail later.

Knowing your debts is also essential. Why? Some collectors are not afraid to lie and call more money than you really should. Thus, it is important to know every penny you owe in order not to overpay collectors out of fear.

Also, in order to deal with the situation, it is important to understand how debt collection works in general. After reading some information on this issue, it will be much easier for you to understand the situation and respond to the collectors.

How does debt collection work?

Unfortunately, debt accumulates like a snowball. Most people take out Personal loans and go into debt because they can't handle life situations that don't get any easier next month. Thus, you have to take out a new loan or miss a payment just to make ends meet. After a few months, a person is already on the verge of despair and does not understand if there is any way out of this vicious circle.

As a rule, after three months, you will receive regular phone calls, emails, and letters. Moreover, the collectors resort to threats, insults, and intimidation in order for you to give them your last money even when you do not have it. Thus, you can either pay and be left without food or shelter, or do the right thing and find a solution. However, first of all, you need to know what kind of debts can go to the collectors.

Typically, any unpaid debt can be sold or assigned to a debt collections agency. Oftentimes, debt collection agencies are hired to collect debts on mortgages, student loans, car loans, credit cards, and medical bills. Of course, you have to pay off the debt, but the collectors often overstep their authority. Let's talk about this in more detail.

What debt collectors can and can't do

Sometimes collectors use any means to get you to pay a debt. However, what if you don't pay? What can they do? Of course, collectors have several legal options, but they are often limited. Thus, it is important to know what they can and can't do. We have already talked about the fact that there is the Fair Debt Collection Practices Act, which can protect you from collectors who neglect their duties. So, carefully study the information below in order to better know your rights.

What debt collectors can do

  • Collectors have the right to speak with your family to find out how to contact you.
  • They also have the right to contact you by any means between the hours of 8 a.m. and 9 p.m.
  • Collectors can also sue for payment.
  • Also, collectors have the right to charge interest (but not on top of any interest you were already paying)

What debt collectors can't do

  • Pay attention to these points in order to be able to confront them in the event of intimidation.
  • Collectors have no right to hide the amount you owe or lie about it.
  • Collectors have no right to withhold information or lie about who they are.
  • Collectors are not allowed to talk to your family more than once in order to intimidate or embarrass you.
  • Collectors also cannot harass or threaten you with foul language or jail time.
  • Collectors have no right to continue trying to contact you if you asked them to stop by writing a certified letter.

If the collectors continue to threaten you, harass you, or lie to you, you can always contact the Federal Trade Commission and report what is happening. You can also hire a lawyer who will help you to send a certified letter where he will ask you to stop contacting you. This way you can be safe.

How to avoid paying collection agencies?

Many people often ask whether it is possible to avoid paying debt collectors. However, face it: if you have a debt, you have to pay it back. Of course, before doing this, you need to take care of four walls, but the debt is still yours.

However, the ability to communicate and negotiate with collectors can help you understand the situation and avoid intimidation and humiliation on their part.

So, here are some useful tips for working with collectors:

  • First of all, get the settlement offer in writing. Until you get this, it is not worth giving them any money. It is important to keep a copy of the document in order to always know the amount of your debt.
  • Also, do not make the mistake of giving them access to your checking account, as they will take all your money. Once you agree to pay any amount, collectors will want to draft your account for that amount. However, remember that this is a lie and they have no right to lie to you, so they are already breaking the law. As a rule, many people fall for this trick and then the collectors take more than the agreed amount, so you can be left without funds.
  • If you have already given the collector access to your checking account, the situation can still be corrected. You need to open a new account in order to receive your salary. You know, this is not the most pleasant way, but it is better to open a new account than to lose all the money when your salary comes.
  • Another important point is that you should not send them a personal check, as they can use account numbers on your check to access your account and collect the debt in such a way that it is also illegal. However, how do you pay? Everything is quite simple, you need to send them a money order or cashier's check. This is safe as they do not have account numbers on them.
  • So, try to make monthly payments in order to get rid of debt. Even if these are small amounts, they will help you to gradually cover the debt and deal with the collectors.

How to spot a debt collection scam?

Unfortunately, the collection of debts is another industry where fraudsters deceive people. Some people introduce themselves as collectors in order to get your money fraudulently. Thus, it is very important to be careful not to give your last money to the wrong person. So how do you make sure a debt collector is legit? Pay attention to the following points:

  • Browse your mailbox. By receiving a validation letter, you can make sure you are dealing with a legitimate debt collector. Also make sure the collection company is legal in your state. If the collector contacts you by phone call, ask him to send you a validation letter before answering any questions and paying him money.
  • Check your details. There are situations when the collector and the debt are legal, but they are not yours. So, you need to request personal details about the debt, including the original creditor and the amount. Thus, the debt may be legal, and may also be written in your name, however, it might be from an act of identity theft. Thus, check the data so that this situation does not happen to you.
  • Pay attention to the payment methods. Many scammers say that you can only pay off your debt through a wire transfer or a prepaid debit card. However, you have the right to repay the debt in other ways, so most likely you are dealing with a scammer. Also try to negotiate - many legal collectors are ready to create a payment plan so that you can pay off the debt, while fraudsters will threaten you and demand the full amount right away.