3 Debt Collection Scams You Need to Avoid!

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Here’s the Video Transcript:

– [Nicole Protect yourself from these three common debt collection scams. I’m Nicole from LowIncomeRelief.com. We help low income people save money and get free stuff. Be sure to subscribe to our channel and enable those notifications so you never miss a video. Debt collection scams are very common. Debt collection loss has very specific guidelines about what debt collectors can and cannot do. Usually though, debt collectors don’t know or don’t care. They don’t have a lot of incentive to follow the law. Collection agencies make millions, even billions of dollars from breaking the law. When they do get sued or penalized, the amount they pay is a pittance compared to how much they’ve earned from these scams. We can’t change the industry overnight, but we can learn how to stop debt collectors from manipulating us with their scams. It’s important to know how to protect yourself against fraud and abuse and that’s what we’re gonna teach you about today. Scam one, you’re contacted by someone who says they need to serve legal papers on you.

This scam has actually happened to me personally several times. The scam usually goes something like this. You’ll get a call out of the blue from a restricted number. They’ll say their name and something like Jim and they’re calling from a really common and official sounding legal service provider. And they’ll say they have court paperwork that they need to serve you with today. You’ll respond confused and the person calling you won’t offer you any information. They’ll just say I have to get you these papers right away. I can’t tell you anything else. You’re gonna need to call this other phone number for more information. Now there are a lot of red flags in this situation because real process servers who are serving real legal paperwork do not call in advance to tip you off. If you’re being served a real lawsuit, they’re just gonna show up at your address. They’re not gonna call you.

So if you get a call from someone that’s claiming that they need to deliver legal paperwork to you, you should automatically be very skeptical. Even though I already knew this, I’m a very curious person so I went ahead and called the number that I was given by the alleged process server and I spoke to a representative named Robert who claimed I was being sued for an old loan that I had totally forgotten about. Anyway he said I had to pay the amount before the legal server arrived or I wouldn’t be able to avoid the lawsuit, I’d end up in jail, my life would be ruined, blah, blah, blah. Knowing what I know about how the debt process works, I asked a lot of questions that clearly made Robert uncomfortable. He eventually placed me on an extended hold during which I did some Google searches and discovered that the company he claimed to represent didn’t even exist. Anyway this scam has happened to me at least three times in the last year and every time, it basically works like this. First a debt collector claims to be a process server and they call you.

They say that they’re going to serve legal paperwork on you and they try to scare you. Next, you’re scared so you call the number that they’ve given you and when you finally make that call, another debt collector who’s probably sitting right next to the first guy hypes up the alleged lawsuit and insists that you have to cooperate or all of these bad things are gonna happen to you. All of this pressure in the short timeframe are designed to scare you into paying immediately and without question even if the debt is completely invalid. I have safely ignored this scam every time I’ve encountered it and you know what, I’ve never been sued because of it. I wasn’t even served and it’s a violation of debt collection law because debt collectors are not allowed to threaten to sue you when they do not have any intention of actually doing it.

Scam number two, the debt collector claims you’ll be arrested or jailed for not paying. You cannot be arrested simply because you cannot afford a debt. Debts are a civil matter, not a criminal one. Sometimes debt collectors impersonate as police officers or even FBI agents, but law enforcement personnel do not collect on debt. Dateline once covered how some debt collectors pose as law enforcement. Sometimes they’ll claim that felony charges have been made or say that warrants have been issued. So it’s important to know that you cannot be arrested simply because you did not pay a debt. If someone contacts you and claims to work for a law enforcement agency, write their name down and hang up.

Call the agency back directly at their published number and you’ll most likely find that you cannot locate the person who called you. Scam number three, zombie debt that just won’t die. Zombie debt earned its name because it comes back again and again and again even after you think it’s been dealt with. These debts are created because companies extract as much money as they can and then they sell the remaining debt to another company. The new company tries to get the rest from you and they sell whatever remains to another company. The market of debt buying and selling is a complete mess. In many cases, debts are bundled together and sold as is. The seller acknowledged that there might be faults in the paperwork, but buyers still buy them. Why because they pay just pennies on the dollar and the opportunity for returns are huge.

Buyers of zombie debt usually have little more than a main contact information and an alleged amount owed. They usually can’t verify the debt because they lack the necessary paperwork to pursue the case in court, but they’ll never tell you that when they contact you. Instead, you’ll find zombie debt popping up on your credit report again and again and again. Sometimes it’ll persist after the original statute of limitations has passed and if you make a voluntary payment, you can reset the statute of limitations and accidentally validate that debt.

If you receive a collections notice or call for an old debt that may be close to or past the state of limitations, do not pay it. Check the dates first to see if you’re being tricked into turning a time-barred debt into a zombie debt. The best way to fight zombie debt is to submit a written demand for the debt collection company to verify their rights to collect on that debt. There is certain paperwork that they have to maintain in order to legally collect. One of those things is a valid unbroken chain of assignment that shows all the companies that have owned that debt all the way back to the original creditor. If they can’t show you that paperwork, the debt is not valid and you should not pay it. You can also request to have invalid debt removed from your credit report. So what should you do if you’re the victim of one of these scams? The most important thing you can do is to always document your interaction with debt collectors.

By law, they have to identify themselves when they call you. Always take notes when you speak with a debt collector. You should always write down the debt collector’s name and the collection agency’s name. Get the company’s contact information. Be sure to ask who the original creditor was, what the original balance was and what the current balance is. If there’s a difference in the amount owed, ask why. You should also document the time, date and duration of each call. Another thing you should write down is any suspected debt law violation that occurs when you are contacted by a debt collector. You are going to want the time, date and the type of violation that you suspect occurred. If the debt collector has broken the law or said anything suspicious, put it in your notes and if the violation occurred in a voicemail, be sure to save that voicemail.

You may be able to sue, counter sue or use this in your negotiations on these debts if they have violated debt collection law. Of course it’s important to pay the debts that you legitimately owe, but you should never pay off a debt without having something in writing. This is especially true if the company has offered you a settlement. You need to have proof of that offer in case you someday need to defend it if the debt pops up again.

For more information about these and other debt collection scams, please visit our website at LowIncomeRelief.com. Thank you so much for watching. I hope this video was helpful to you. Be sure to subscribe to our channel and visit LowIncomeRelief.com to discover all the ways that we can help you save money and get free stuff..

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