“Phantom Debt Collecting” Scam

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The latest consumer scam is something called “phantom debt collecting.” Usually the scam begins with a phone call where the caller alleges a victim owes money for something. An intimidating voice on the other end informs the victim that he or she owes money and must pay up immediately or face legal action. However, in this scam, the debt doesn’t even belong to the victim. Such calls cause many consumers to question whether someone has taken out loans in their name because these con artists are that intimidating and persuasive.

Thousands of consumers have experienced this frightening situation in recent years. This is the second most complained about problem reported by consumers, second only to identity theft. The callers pose as valid debt collectors and may even have a few pieces of personal information, such as the last four digits of your social security number. The caller may inquire about more personal information. In these situations, “phantom debt collecting” could lead to identity theft.

So how do consumers protect themselves? First, if you receive a phone call from someone alleging they are collecting a debt, ask for the company’s name and address and for the name of the original creditor. Hang up if they can’t supply this information. Second, call creditors back yourself at the phone number on your loan paperwork if you’re worried about the status of an unpaid debt. Third, it’s probably a scam if the amount demanded is considerably more than any debt you owe. Fourth, check your credit report. Consumers can do this once a year at no cost by going to annualcreditreport.com. It’s probably a scam if the debt the caller alleges you owe is not listed on your credit report. Finally, if the debt collector is abusive or threatens legal action or arrest, do not be intimidated. You cannot be arrested over unpaid debt. Demand that written notice of the debt be mailed to you by the alleged debt collector.

Brent Vullings