Debt Collection Scams

What to do if you are contacted by a Debt Collector and you don't owe the debt

If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a "debtor." You may even get calls from debt collectors who say you need to pay on a debt left by a dead relative (that is a scam!). If you fall behind in repaying your credit cards, your creditors, or an error is made on your accounts, you may be contacted by a "debt collector." Yes, some people run up debts and fail to pay what they owe.  But there are also debt collection agencies and debt collectors who perpetrate scams on honest people who owe nothing; and debt collectors who clearly violate the law in collecting debts. Bill collectors are now going after anyone who has the same name or a similar name to someone who owes a debt. The collectors are threatening them and ruining their credit, event though these consumers are innocent of any wrongdoing. You should know that in any situation, the Fair Debt Collection Practices Act requires that debt collectors treat you fairly and prohibits certain methods of debt collection. Of course, the law does not erase any legitimate debt you owe.

First, you need to know your rights, which are primarily spelled out in the Fair Debt Collection Act.  Click on the link to read it!  It is not hard to read! 

Typical Real Potential Scam Situation:

January 9, 2007

I received a phone call today from  company called  "FIRST NATIONAL COLLECTION BUREAU". The woman (who said her name was Dee Williams) said she was attempting to collect a debt from 1989 for $830. I don't recall any such debt and I disputed it with her. She would not give me any specific information, not even the name of the store to whom the debt is supposedly owed.

After i hung up, I became suspicious, so I called back and asked for her again. The person who answered the phone wouldn't let me speak to her , and asked for my social security number to look up my account.  I did not give it to him.  He referred me to another phone number.  At this number, they had no information about my account.

I believe this is a scam to extort money and /or gather personal information for identity theft fraud.

Here is the info I have: First National Collection Agency, somewhere in Nevada. Phone 800-824-6191

See this page for another actual Debt Collection Scam Email: IAC Recovery Systems Ltd, Past Due Notice

What to do - step 1 - verify the debt

If, like the woman in the letter above, you get a letter or phone call saying you owe money, you must respond to it. First, any legitimate collection agency, must, by federal law, tell you the name of the company to whom you supposedly owe a debt.  Contact that company to verify:

  1. First, find out if that the collection agency is authorized for this collection. Under the federal laws, they are required to put the details in writing given by your company to whom the debt is owed.. Do not make any payment until you have verified the debt account.
  2. Have you talked with the company regarding this account? If you really do have an outstanding dept with them, you can usually work out arrangements with them. If they accept payments directly, you won't have to deal with the collection agency.
  3. Check that the statute of limitations hasn't passed (for debts older than 3 to 15 years - it varies by state; check this page)

What to do - step 2 - reply to the debt collector

You should send a certified letter, that says you do not owe the debt and you will sue them if you are contacted again or if the debt is reported to a credit bureau. And, if they do report a debt, you can get a lawyer and sue!

Usually, just sending these scam debt collectors the following letter, by certified mail, will be enough to stop them.  Of course, change the letter to use your name, the account number that the debt collector claims and the current date.

Sample Letter to Send to the Scam Debt Collector

To Whom it may concern: 
I have been contacted by your company about a debt you allege I owe. I am instructing you not to contact me further in connection with this debt. Under the federal Fair Debt Collection Practices Act, you may not contact me further now that I have notified you not to do so. 
(Account No.) 

What to do - Step 3 - File complaints!

You can file a compliant against a debt collector with the FTC - Use this form to submit a complaint to the Federal Trade Commission (FTC) Bureau of Consumer Protection about a particular company or organization.

You can also fight back with a lawsuit - First, see the answer to this question, then see Handel on the Law to find a recommended lawyer near you. You may also be able to file a lawsuit in small claims court yourself.

Here are some other steps you can take:

  1. Contact your state attorney general - see this page for the contact information.
  2. Report them to the FBI here.
  3. See these websites for more information about how to protect yourself from debt collection scammers:
    National Association of Consumer Advocates
    My Fair Debt
    Consumer Credit Advocate Bud Hibbs
    Clark - Clark has additional resources; he says: "Collection agencies should never threaten or torment you; it's against the law. I provide a "Drop Dead" letter below that you should send if a collector is harrassing you. Learn more about your rights here.

    Consumer Counsel Group
    Lawyers: Warren & Vullings, LLP

And let us know about it!

More Resources

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

If you believe you may have fallen victim to an internet scam and wish to report it, please file a complaint with the U.S. government Internet Fraud Complaints Center


And please let us know about any suspicious calls or emails you receive.  We look for patterns so that we can alert the authorities and victims to new scams, before it is too late!




For a comprehensive list of national and international agencies to report scams, see this page.