The Federal Trade Commission governs much of our industry, and handles numerous complaints from consumers on such matters as Fair Debt Collection Practices Act violations. The newest scam appears to be the hiring or creation of call centers made up of fake debt collectors to make strong-arm collection calls on fake debts!
Yes, scam artists have figured out that if you harass someone enough, they might just pay a debt that doesn't even exist...just to get the "debt collector" off their back! The FTC offices are referring to this scam as phantom debt.
A number of consumers have already admitted to paying hundreds of dollars by check and even credit cards, to get rid of "collectors." These consumers paid these fake debts as they were worried the fake collectors really would follow up with threats to have them fired, garnished, arrested at work, or, they thought they may really owe the money from some pay check advance or similar situation they simply forgot about.
For those of us who are involved in legitimate collections, knowing that intentional violators of the FDCPA exist is bad enough. Now we find that scam artists have invaded our industry and are making collection demands on debts that don't exist to get money from innocent people.
According to a recent article in the Detroit Free Press (freepress.com), some callers are demanding as much as $2,000 from consumers, under threats of wage garnishments, having the consumer arrested at work and the like. The scam artists seem to have quite a bit of information on the people they are calling. Since one crooked debt collection firm took in $5 million, the scam obviously works.
I firmly believe anyone reading this blog is an honest debt collector just trying to collect on legit debts using legal means....however, we can't put our collective heads in the sand...we have to be aware of these illegal practices.
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