How and Where to Report Debt Collection Scams

Imagine you get an urgent text that says you have an old debt you have never heard of. The message looks official—it even has letterhead and a professional-looking link to a website. Before you panic or your wallet starts to bulge with fear, take a breath. You could be one of the millions of Americans being scammed today.

These scams have gone beyond just phone calls. According to the Federal Trade Commission’s latest reports, in 2023, Americans lost over $10 billion to fraud. That’s the biggest number and biggest dollar loss ever and surpasses the previous year’s record by 14%. Today, these scammers are using technology-savvy digital tactics, using email for the first time. Email has surpassed texting and phone calls as the favorite method used by scammers to target consumers in 2023.

How Scammers Try to Trick You

Those days of obvious robocall scams are gone. Today’s debt collection scammers are sophisticated. Here’s what you need to know:

Digital Deception

Today’s scammers create convincing forgeries using real company logos, professional letterheads and fake payment portals. They send urgent messages demanding immediate action and threaten legal consequences to get you to pay quickly. Remember, legitimate collectors won’t rush you or threaten you.

Phone Scam Tactics

Fraudsters can make calls look legitimate by using local area codes and changing caller IDs to show that they come from legitimate company names. They will use professional-sounding recorded voicemails and human-sounding pre-recorded messages in their efforts to get you to return those calls without even verifying them.

Social Media Scams

Be wary of scams on social media. These include direct messages claiming to be a collection agency, links to allegedly "verify" your account, and fake profiles made up as a collection agency. A few will go so far as to promise to "out" the debt in public. Official collectors do not use social media for collections or intimidation.

Never click on any links or respond to demands for urgent payment without confirming the collector through official channels. Official debt collectors are always prepared to provide written validation and never threaten you with immediate payment.

Red Flags to Watch For If a Collector:

• Does not provide written validation of the debt
• Asks you to pay now
• Won't share their company information
• Asks for payment through gift cards or cryptocurrency
• Threatens to contact your employer or family members

Legitimate Collector Requirements

Real debt collectors have to follow the rules. They have to send you a written notice within 5 days of first contact. This notice must include:

• The amount you owe
• The name of the original creditor
• Information about your right to dispute the debt

How to Protect Yourself Before you respond to any debt collection contact:

• Ask for written verification of the debt
• Never share personal or financial info
• Check your credit report for the debt
• Document the collector's information
• Report suspicious behavior to the FTC

Need help verifying a debt collector? Report Fraud.ftc.gov or 1-877-FTC-HELP.

A legitimate debt collector will never ask you to pay now or threaten to arrest you. Take your time to verify any debt collection attempt, no matter how urgent.

How to Know if a Debt Collector Is Real

Request Written Validation

1. Always ask for written validation before you pay
2. Under the FDCPA collectors must send written validation within 5 days.
3. The validation letter must have your total debt amount, your original creditor’s name and your dispute rights.
4. Don’t discuss payment until you get this notice.

Learn more at the Consumer Financial Protection Bureau.

Check the Collector’s Identity

1. Check through official channels first.
2. Search the CFPB’s Consumer Complaint Database.
3. Verify their license through NMLS Consumer Access.
4. Don’t trust the number they called you from - instead check their official contact info independently.
5. Call them back using the verified contact info you found through official sources.

Check Your Own Records

1. Go to AnnualCreditReport.com.
2. Verify the debt exists and the details.
3. Call your original creditor using official contact info.
4. Ask your creditor if they sold or transferred the debt.
5. Keep all your debts, payment history and communication with collectors.

Watch for Current Scam Signals

1. Watch for collectors asking for payments through cryptocurrency, Venmo or gift cards.
2. Watch for high pressure to click links or verify account info on websites.
3. Check the FTC’s latest scam updates.
4. Legitimate collectors never ask for immediate payment through untraceable methods.

Report Suspicious Activity

• File a complaint with the Federal Trade Commission.
• Submit a report to the Consumer Financial Protection Bureau.
• Contact your state’s Attorney General’s office about the scam.
• Keep detailed records of all suspicious communications.
• Get free legal help through the Legal Services Corporation.

Defend Yourself from Debt Collection Scams

Set Up Digital Alerts

Take control of your financial safety by setting up alerts through your bank and credit card companies. Get notifications for all transactions, especially those over a certain amount or made without your card present.

The Federal Trade Commission recommends signing up for free credit monitoring through IdentityTheft.gov which will notify you immediately of any changes to your credit report that could be fraudulent.

Monitor Your Credit

While paid credit monitoring services can be helpful, you don’t need to spend money on basic protection. Get your free weekly credit reports through AnnualCreditReport.com the only authorized source for free credit reports under federal law.

Review these reports weekly for unfamiliar accounts or collection notices. If you see something suspicious, put a free fraud alert on your credit reports through any of the three major credit bureaus: Equifax, Experian or TransUnion.

Protect Your Personal Info

Never give out sensitive info like your Social Security number, bank account or credit card numbers to someone who contacts you out of the blue. Legitimate debt collectors already have basic info about your debt and don’t need to “verify” this info.

The CFPB says scammers use data breaches to make their calls seem legit. If someone contacts you about a debt, verify their identity through official channels before you give out any info.

Recognize Digital Payment Red Flags

Be extremely wary of debt collectors asking for payment through unusual methods. Legitimate collectors accept payment through secure, traditional channels like checks or credit cards.

According to the FTC, requests for payment via cryptocurrency, wire transfers, gift cards or money transfer apps are major red flags. Never pay someone claiming to be a debt collector through these methods as these transactions are usually irreversible and untraceable.

Where to Report Debt Collection Scams

Here's where you should report if you've encountered a debt collection scam:

• File a complaint at ReportFraud.ftc.gov or call 1-877-FTC-HELP (1-877-382-4357). End with the phone numbers, emails, and any payment requests you received.
• Go to consumerfinance.gov/complaint and file your report. They will contact the company directly and work to have your case resolved within 15 days.
• Find your state's attorney general. They can investigate and take action against scam artists in your area.
• Report your losses on money or identity as fraud to the local police to allow easier follow-up between your bank and them concerning fraudulent charges on credit cards.
• Report scams at BBB to warn others in your community. If the scammer pretended to be a legitimate agency, also report it to acainternational.org/consumers.
• Submit your case to IC3.gov to track scam patterns and educate others.

Keep copies of everything, whether it is text messages, emails, phone records-even payment requests. Strong documentation allows law enforcement to build stronger cases against scammers.

How To Preventing Future Scams

Your Rights

Know your rights under the Fair Debt Collection Practices Act (FDCPA). Check out the new digital communications rules. Sign up for CFPB email updates to get notified when your debt collection rights change.

Financial Education

Free education through the FDIC’s Money Smart program, personalized help from certified counselors through the National Foundation for Credit Counseling - find one near you.

Using Technology

Download the FTC’s fraud reporting app for scam alerts and reporting tools. Turn on your phone carrier’s free scam-blocking features and consider using a trusted call-screening app to block fraud calls before they get to you.

Local Help

Free workshops at your local library or community center. Credit unions offer free seminars on debt collection rights and fraud prevention. Find participating locations. These local resources will give you updates on scams in your area.

Steps to Stop Debt Collection Scams

When you’ve been scammed by a debt collector, speed and the right resources are key.

• The Federal Trade Commission and Consumer Financial Protection Bureau is your first stop for reporting fraud.
• If identity theft is involved, go to IdentityTheft.gov to start your recovery plan.
• You can also contact your state’s attorney general through naag.org/find-my-ag for local help.
• For credit protection contact the major credit bureaus – Equifax, Experian, and TransUnion – to put fraud alerts or credit freezes.

Protecting yourself from debt collection scams is an ongoing process. Always verify debt collectors, keep records of all communication and never share personal info without confirmation. Report suspicious activity right away – your report helps authorities track patterns and protect others.

The Bottom Line

Don’t let scammers rush you into a decision. Take time to verify, document and report suspicious collection calls. Use the resources here to protect yourself and stop fraud. If unsure about a debt collector’s legitimacy pause and verify before taking action. Your financial safety is worth the extra time and caution.

Debt Collection Scams FAQs