Sense & Centsibility Blog
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Collection scams alert: how to spot them

As if we do not have enough scams to worry about, the latest and greatest in the collection world are companies trying to collect on debts that people do not owe. At LSS Financial Counseling, our goal is to give you the tools and resources to defend yourselves against scams like this!

How These Scams Work

The consumer will usually receive a hostile collection call from the (we’ll call them "scammer") followed closely by a legal-looking collection letter that threatens legal action if the debt is not paid immediately. The scammer will then usually offer to settle for much less than the original debt to make it appear that they are offering a really good deal if the consumer can pay right away. (Wow! Aren’t they so nice?)

The catch? You probably don’t even owe this debt. Not sure if the debt is yours? Ok, some of you will know instantly that you do not owe the debt and that this is some sort of hoax. But for those of us who are not the most organized people in the world, it may not so outrageous that we somehow misplaced a debt along the way. Here are a couple flags to watch for:

  • Can the collector tell you where the debt originated? If they are vague and/or never truly say who you originally owed, it could be a debt that you do not owe.
  • Does the collector have a physical address and can send you something in writing? If you never receive an address to contact the collection company in writing, there is a good chance you are the target of a scam.
  • Is the debt appearing on your credit report? If not, the debt might not be yours. If you haven’t obtained a copy of your credit report lately, you probably should. You can get three free credit reports a year, one from each of the bureaus. The safest and easiest way I can recommend to obtain a copy of your credit report for free is by visiting Annual Credit We can also help you understand your report. (Because of COVID, the three bureaus are now offering free weekly online reports through the end of 2023.) 

Your Rights

It is important to know your rights when dealing with these scammers. The Fair Debt Collection Practices Act (FDCPA) says that:

  • Within five days after the debt collector’s initial contact, they must send you a statement of the total amount owed to the creditor and must not use false or misleading information about the debt. (If you do not receive a letter, this could mean you are being scammed).
  • Debt collectors cannot use unfair practices, such as collect more than your own on a debt.
  • A debt collector cannot use abusive practices like threatening you with violence or using profane language.
  • You can file a complaint with the federal Consumer Finance Protection Bureau if your rights are violated.

When Speaking with Collectors

Never give out any credit card, debit card or bank account numbers to an unfamiliar company over the phone, and always ask for proof of the debt in writing. If they are unwilling or unable to produce documentation showing that you truly owe the debt, then you do not have to pay and/or they can’t collect on it. If a company will not leave you alone and also will not provide any information on the debt, please contact your state’s Attorney General’s Office immediately.

The best way to keep yourself protected from scams like this one is to educate yourself. Listen to the news, research scams and of course, follow our blog. We post regularly on scams as we learn of them. I also recommend setting up an appointment with us. Give us a call at 888.577.2227, or visit our website to get all your support online.

Written by Leah Michaelis