Protecting Yourself from Debt Collection Fraud

by Miles Morley, Legal Assistant

I recently wrote about the Consumer Sentinel Network’s 2014 data book for reported instances of fraud. As a follow up, I am taking a closer look at each of the top ten types of fraud complaints in Michigan. The top instance of fraud reported in Michigan was titled “debt collection.” This category represented 14,284 complaints, or nineteen percent of complaints from Michigan residents.

In this type of fraud, the perpetrator will contact a victim and attempt to convince them that they are taking collection action on a debt. Sometimes the perpetrator will have access to some personal information or knowledge that the victim owes a debt, and sometimes they are just fishing for potential targets. A perpetrator of this type of scam may be very aggressive. They will often demand some kind of payment or information in return for settling the debt and threaten the victim with serious consequences. It is difficult to determine whether a call from a creditor is a scam or legitimate collection attempt.

It is critically important not to provide personal financial or other sensitive information unless you are certain they are legitimate. Crafty perpetrators may try to provide information that is publicly available to establish authenticity, or may provide made up information and hope that you will correct them with the information they seek. As such, never confirm or provide any bank account, credit card, social security, or birth date to a party unless you are certain they are legitimate. This information could be used for identity theft.

To determine if the caller is legitimate, you will need to ask for details. Tell the caller you will not give any information without the caller’s name, company, street address, telephone number, and the original creditor of the debt. You can verify some of that information online. If they refuse to give the information, or it doesn’t match the online records, hang up.

You can request a written “validation notice” that should list the amount of the debt that is owed, the creditor it is owed to, and a description of certain rights under the federal Fair Debt Collection Practices Act. If they refuse, you should consider making a request in writing and keeping a copy of that request.

If you are concerned about a legitimate debt, contact the creditor at the number provided in your loan paperwork. If you suspect an instance of collection fraud, you can file a complaint with the Consumer Financial Protection Bureau, the Attorney General’s office, or law enforcement. If you have questions related to collection fraud or collection matters, you can call the Legal Hotline for Michigan Seniors at 800.347.5297.

Other Resources:

Consumer Financial Protection Bureau

OLYMPUS DIGITAL CAMERAMiles Morley is a legal assistant and website administrator at Elder Law of Michigan, and has been a member of the Elder Law team since August 2014.

Miles holds a Bachelor of Science in Computer Information Systems from Baker College of Owosso, Bachelor of Science in Political Science from Lake Superior State University, and graduated with his Juris Doctorate in 2013 from Michigan State University College of Law.

Before joining the Elder Law of Michigan team, he served as an intern at the United States Coast Guard Headquarters . As a legal assistant at ELM, Miles provides legal advice, under the supervision of our hotline attorneys, to Michigan Seniors on a wide-variety of areas, including Medicare/Medicaid. As a website administrator at ELM, Miles is responsible for technology and programming projects.

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