The Federal Trade Commission reports that over 154,272 debt collector scams reports were received in 2021, with 50.1 percent of these reports relating to abusive debt collection activity or a debt not owed by the consumer. This means that scammers are increasingly targeting people with false claims about money owed.
As most people are aware, many scammers are posing as debt collectors to take advantage of individuals. However, there are also many legitimate debt collectors out there. It is essential to distinguish between the two to protect your finances and personal information. Here are some red flags to watch out for that may indicate a scammer:
A guide to spotting collection scams

Dealing with debt collectors can be a stressful experience. Here are six signs that you may be dealing with a credit collection scam:
1. They pressure you
Some credit collection scams use scare tactics and threats to get what they want. Others may try to play on your emotions, making you feel guilty or irresponsible. They may also try to create a sense of urgency so that you’ll make decisions quickly.
When dealing with debt, it’s essential to be aware of scams. Scammers will often pressure you into acting quickly without asking any questions. Threatening you with jail time is a major red flag and a violation of your rights.
Debt collectors are not allowed to use any methods that could be considered harassing, oppressive, or abusive in an attempt to collect on a debt. This includes making threats, using profanity, or causing physical harm. Even if you owe money, debt collectors are not allowed to treat you this way.
The collections agency can only call you between 8 a.m. and 9 p.m. in your time zone, and they are not allowed to call your workplace. You can tell them to stop calling you at work, and they are not allowed to make repeated phone calls intending to annoy you – that is against federal law.
2. They won’t give you their contact information
There are many reputable debt collection companies out there that can help you get your finances back on track. Make sure to research and choose a company with positive reviews and a good reputation.
You might be dealing with a scammer instead of a legitimate collection agency if they try to distract you from your questions and insist that the debt be resolved immediately. Be wary of anyone who refuses to disclose their identity and company information, as this could signify that they are not legitimate.
3. The debt isn’t yours
Be wary of debt collectors who bully you into paying for a debt you don’t even recognize. You can ask them for the creditor’s name and how much you owe. By law, they are required to give you this information.
It’s essential to stay on top of your credit report, especially when you have outstanding debts. Knowing which debt collection agencies your defaulted accounts have been sold to can help you keep track of them and eventually pay them off. You can get this information from your original lender or creditor or by checking your credit report.
4. No letter was mailed to you
The letter from the collection agency should disclose the following:
- The debt amount in question
- The creditor who is owed the debt
- A disclosure statement gives the consumer 30 days to dispute the debt.
Keep any letters you receive from scammers. You can use them as references if you’re contacted by one again.
5. Money transfers or prepaid cards are accepted
Scammers love non-reversible payment methods like prepaid cards, money orders, or money transfers. These forms of payment can’t be traced, so scammers can take your money and get away with it. Be on the lookout for unusual payment requests.
To make sure you can verify that you have paid a legitimate debt collector, pay in a way that allows you to track the payment and amount.
6. Your creditors threaten to share your debt with your coworkers, friends, and employers
These agencies are typically not allowed to share details about your debt with most people. This protects your privacy and prevents anyone from coercing you into making an immediate payment. However, there are some exceptions to this rule. For example, collection agencies may be able to share information with your spouse or other family members.
It is illegal for debt collectors to tell your employer or family members about your debt to pressure you into paying. According to federal law, they are only allowed to inquire about your whereabouts.
There are four ways to prevent debt collection scams

Debt collectors may scam you by asking for personal information or money. Follow these tips to protect yourself, your bank account, and your personal information.
1. Get in touch with your creditor
To find out where your debt comes from, contact your creditor to see their information about the debt in question. This way, you can determine whether the company that got you is a legitimate debt collector.
It’s essential to be vigilant when it comes to debt collection letters. Make sure to request a validation letter or confirmation from the collection agency. This way, you can confirm the letter’s legitimacy and avoid being scammed.
2. Make sure your credit report is accurate
Checking your credit reports is an excellent way to see whether the debt the collector mentions is on there. You’re entitled to one free credit report from each of the three main credit bureaus (Experian, Equifax, and TransUnion) every year, which you can access at AnnualCreditReport.com.
Many debts go unreported and, as a result, do not appear on your credit report. This means that you may still be liable for the debt, even though it is not reflected in your credit history. Therefore, it is essential to do your research to see whether or not the alleged debt is yours.
3. Make sure you don’t disclose any financial information
Don’t give out personal or financial information to someone you don’t know. Ask for their name, the company they’re with, and how to contact them. Get as much information as you can before giving anything away.
Research the debt collector before you provide any information. Try to call the company or send it an email. Verify that the debt collector is legitimate before discussing your financial or personal information.
4. Know your rights and stay calm
Dealing with a debt in collections can be challenging. Still, taking your time and making the best decision for your situation is essential. Rushing into a decision can lead to more stress and embarrassment.
As soon as you receive a notice from a debt collector, request the verification of the debt. This documentation should include where the debt originated when the collection agency acquired it, and how they arrived at the current balance. Without this verification, you have no way of knowing whether you owe the debt or not.
The Fair Debt Collection Practices Act protects consumers from being harassed by debt collectors. Legitimate collectors must identify themselves and can only contact you during regular business hours. They can’t communicate with anyone about your debt except for your attorney, the attorney for your creditor, or the collection agency. In some cases, they may also be able to speak with a consumer reporting agency.
Different states have different statutes of limitations on debt. In some states, the statute of limitations may be as long as ten years. This means that a collector cannot sue you for a more than ten-year debt. However, the collector can still attempt to collect the debt from you.
Reporting fake debt collectors

There are ways you can fight back against scams. Here are some things you can do to protect yourself and take action against scammers.
1. Keep a paper trail
Keeping records of all communication with collectors is essential to protect yourself from unfair debt collection practices. This includes taking notes on the date and time of every phone call, saving emails and texts, and gathering letters and any other correspondence you receive from the company. In some states, it is legal to record phone calls. The more information you have, the stronger your complaint will be should you need to file a report.
2. Reach out to your state’s attorney general
The attorney general’s office protects consumers from scams and fraud, including debt collector scams.
3. Submit a complaint
Reporting a fake debt collection agency is essential to protect yourself and your finances. The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) are two organizations that can help.
Since November 30, 2021, there have been significant changes to the debt collection process. One of the most significant changes is that debt collectors can now contact you via email, text message, and direct social media messages.
As we increasingly rely on technology for communication, it’s essential to be aware of the dangers of scams. With more opportunities for scammers to reach us, we need to be vigilant and know our rights.
In summary

Research before agreeing to repay any debt a collection agency contacts you about. You could be dealing with a scammer trying to exploit innocent consumers. Familiarize yourself with the common tactics used by scammers, and file a report with your state attorney general’s office, the FTC, and the CFPB if you believe you are dealing with fraud.
You have a right to know your rights when dealing with debt collectors. File a complaint promptly if you feel that your rights have been violated.