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Beware of This New Debt Collection Scam


The Federal Trade Commission is warning consumers of a new debt collection scam involving fake collection notices for phantom debts. According to the FTC website, criminals are putting a creative – and scary – twist on an old scam by impersonating judges, court officials, and law firms. These fake debt collectors are using intimidation to try to get consumeres to send them money for debts that they don’t actually owe.

Here’s how it works: scammers are sending official-looking letters and making threatening phone calls to consumers, saying that they owe large amounts of money for an unpaid payday loan. The letters, which can contain seals, a judge’s signature, and all of your sensitive personal information, give all appearances of being legitimate. However convincing one of these letters may seem, it is absolutely critical that you look it up first to verify before sending money to anyone. Look up the real number for the government agency, judge, or office the letter claims to be from and ask about the letter. More than likely, it will turn out to be fraudulent.

It is important to remember to be suspicious if you are ever asked to load a rechargeable money card or wire funds as a way to pay back a debt. There will never be a valid reason for any legitimate source to ask you to send money in this way.

Here’s how you can tell if a sender or caller is a fake debt collector:

  • They use intimidation to try and get you to pay, including threatening arrest or reporting you to law enforcement
  • They ask you for sensitive financial or personal information
  • They refuse to provide you with a phone number or mailing address
  • They are asking for payment on a debt that you don’t recognize

What to Do if You Suspect a Fake Debt Collector

If you suspect that a fake debt collector is contacting you, here’s what you should do:

  • Tell the caller that you refuse to speak with them further until they provide you with a written “validation notice,” which must include your rights under the Fair Debt Collection Practices Act (FDCPA), the amount of the debt, and the creditor to whom the debt is owed.
  • If you have the address of the caller, send them a letter demanding that they cease to contact you. Legitimate debt collectors are obligated by law to stop calling you if you ask them in writing.
  • Do not give the caller any personal information, including bank account information, Social Security number, etc. Scammers can use this information to commit identity theft.
  • Get in touch with your creditor if the debt is real but you suspect the collector may not be.
  • Report the call to the FTC.

For more information, please visit the FTC online, or contact a Chicago consumer lawyer at Atlas Consumer Law