The Department has seen an increase in complaints involving bogus debt collectors attempting to collect bogus debts. We have provided some simple steps to avoid falling victim to a debt collection scam.
How debt collection scams work
Fake debt collectors start by contacting you by phone, text, mail or email. The tax collector claims that you have a debt. The debt can be completely bogus, not even yours, canceled, discharged from bankruptcy, forgiven, or past the statute of limitations, or “time-barred,” which means a debt collector cannot sue you or threaten to sue you for it.
Before paying the collector, make sure the debt is a valid debt that you owe and not just a scam. The scammer will use various techniques (lies, intimidation, harassment) to make you pay. Use the following tips to help you recognize when you’ve been the target of a scam and what you need to do to protect yourself.
You don’t recognize the debt
You may be right if you think the debt is entirely bogus or the amount is incorrect. The debt collector may attempt to collect a debt that is false, cancelled, discharged, forgiven, or past the statute of limitations.
The debt collector will not identify himself
Collection agents are required to disclose their identity when contacting you. A scammer may refuse to share this information with you.
The debt collector is threatening or lying to you
Debt collectors cannot threaten to report you to the police, pretend to be a lawyer or the government, use obscene or profane language, or threaten to tell your employer or family about your debt.
Debt collector demands immediate payment
Scammers are always looking for quick payment. Be very suspicious if the debt collector insists that you pay immediately.
The debt collector is willing to accept unusual forms of payment
Scammers may try to convince you to pay using hard-to-trace methods, such as a gift card, bank transfer, prepaid card, or cryptocurrency. Legitimate debt collectors will accept normal payments such as checks and credit cards.
How to protect yourself
Asking questions is your first line of defense. Debt collection scammers hope you pay them quickly, no questions asked. Do not hesitate to ask them for the following information:
- The name of the caller and the name of the company they work for
- Company name, address, phone number, website and email address
- The debt collector’s license number
- The amount of debt
- The name of the current creditor trying to collect from you
- The name and address of the original creditor
Ask the collector to confirm the debt in writing.
The law requires a debt collector to provide you with information such as the name of the creditor, the amount owed, and how to dispute the debt if you believe it is not correct. If a debt collector does not provide information on first contact, they are required to send you a written notice providing this information within five days of first contact.
Check your credit report for the account in question
You are entitled to a free credit report every 12 months from each of the three major consumer reporting companies. To get your free legally authorized credit report, go to AnnualCreditReport.com or call (877) 322-8228.
Contact the original creditor
If a debt collector claims to collect a debt on behalf of a creditor (such as a payday loan company or other type of lender), contact the creditor to validate the debt.
File a complaint
The DFPI regulates debt collection in the State of California. If a bogus debt collector contacts you or if a debt collector lies or threatens you, you can quickly and easily file a complaint on the DFPI’s File a Complaint webpage.