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What's worse than debt collectors calling? Fake debt collectors...

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You may receive calls from debt collectors trying to recover past-due debts whether you have debts or not. The calls may be from legitimate debt collectors or they may be from debt scammers attempting to extract payment for debts that don't exist. How can you distinguish between the two?

You shouldn't simply assume that if you don't have any outstanding debts, the debt collector is a fake. A legitimate debt collector may be attempting to collect a valid debt based on false information attributing that debt to you – and it's always possible that you have actual debts that you didn't realize were in your name, such as a defaulted account on which you are a co-signer, or fraudulent charges from identity theft. If you would like to monitor your credit to prevent identity theft and see your credit reports and scores, check out our credit monitoring service.

Your best defense lies in understanding what legitimate debt collectors can and cannot do. Debt collection agencies must respect the boundaries defined by the Fair Debt Collection Practices Act (FDCPA), which protects consumers against debt collection abuse.

When contacted by a debt collector, don't react to any initial in-your-face tactics. Use the following methods to determine if the debt collector is legitimate.

Ask for the name, address, and phone number of the company that the debt collector represents. Similarly, ask them to verify the name and address of whom they are trying to reach. A legitimate debt collector should have no problem sharing this information. If they refuse to answer or give incorrect answers for your name and address, do not correct them.

Ask for a validation notice confirming the debt. Legitimate debt collectors are legally obligated to send a validation notice to you within five days of the initial contact. This notice will contain the amount of the debt, the name of the creditor, and a description of the rights afforded to you under the FDCPA.

You can also ask the collector to verify the last four digits of your Social Security number, because a legitimate debt collector is prohibited from answering this question under the FDCPA – but under no circumstances should you verify this information or volunteer it. Never share personal information over the phone with a debt collector.

Among the other things a legitimate debt collector cannot do: Pose as a government official or an attorney, threaten to have you thrown in jail or otherwise be overly aggressive, or insist that payment must be made today to avoid being served with a lawsuit.

Scammers will also try to direct your payment into a single specific method that suits their needs. Legitimate debt collectors should offer multiple payment mechanisms – it is in their best interest to make the payment process as simple as possible for you.

If you think that the debt may be legitimate, but the debt collector is not, contact the original creditor. They will be able to verify who, if anyone, has been authorized to collect the debt.

If the reverse is true and the debt collector is real but the debt is not yours, you can reply within thirty days to the validation notice (in writing) stating that the debt is not yours. The debt collector must not contact you any further unless they supply written debt verification (such as a copy of a bill in your name.) Meanwhile, you can contact the original creditor to determine where the mix-up occurred.

Debt collection calls are annoying under any circumstances, but falling for a fake collection scam is more than annoying – it is dangerous to your financial well-being. A few precautionary steps can help you quickly determine whether a debt collector is legitimate or just another scammer trying to add you to their list of victims.

If you want to settle outstanding debts for less than what you owe, try our debt settlement tool.

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