When repaying debt, most people understand the importance of fulfilling their obligations. However, it's sad that many individuals become victims of numerous scams that can lead to them paying for non-existent debt or more than their actual due. Hence, identifying debt collection scams is essential to safeguard against fraudulent practices.

Types of Debt Collection Scams

There are many types of debt collection scams, and they are often changing. Some of the most common include:

• Debt collectors ask for the information they should already have, which means you may provide your personal information to a scammer.
• Pretending a family member is in dire straights and demanding you pay for them.
• Requesting payment for debts that you do not owe.

Debt collection scams will try to get your personal information and use it illegally, or they will try to get you to pay them over the phone or through a fake website to collect money.

Watching for Red Flags

Determining whether a company is genuine or a scammer can be challenging, particularly if it's an organization you're considering doing business with. However, there are common red flags associated with many scams, including:

• They threaten you. Scammers use threats to encourage you to take action right away. They threaten to call the police, take you to jail, or seize assets they have no right to.
• The scammer will not provide their contact information to you. They insist that you pay them now.
• You do not recognize the debt at all. You may not have any indication of what this debt is, and that's a concern. Most collection agencies will send you numerous letters long before they call.
• They threaten to tell your friends or family you owe a debt.
• They want you to pay through a wire transfer or prepaid card.
• They want to send you a check to cash, and then you can wire the money back to them.

Avoiding Debt Collection Scams

What should you do when the phone rings and you don't recognize the number? Here are some tips for avoiding debt collection scams:

• Always ask the person calling for a callback number.
• Ask for your account information, including the company name and the amount you owe. Then, hang up. Research the company's phone number online and verify the information they provided.
• Ensure you have information about the debt before they call. You should receive written notice about the debt before you pay anything.
• Reach out to the original creditor of that debt. You can then verify if they sold the debt to the collector.
• Check your credit report for any information, including any sign of your debt.
• Don't give out your personal phone number or information on contests and raffles.

Sometimes it can be hard to avoid debt collection scams. If something seems wrong, don't automatically assume you owe the debt. Ask for verification and seek help if you believe it's a scam. You don't have to pay back any debt f the company cannot verify that you owe the debt.

What to Do if You're a Victim of a Debt Collection Scam

When you don't feel that the debt collection is authentic, don't just ignore the calls. Those individuals will likely steal your information and continue to harass you successfully. Instead, be empowered to take action.

One way to do this is by contacting the Federal Trade Commission. You can complain to the FTC about the debt collection company or scammer. They will gather your information and then find out what's happening. Your state's attorney general can also help you in this way.

Protecting Your Credit Score

While you may focus on debt collection, pay close attention to your credit score. It is legal for a debt collection agency with a legitimate debt to report your payment or nonpayment to the credit bureaus, which can negatively impact your credit score.

However, there are several things you can do to protect your score.

• Don't apply for numerous lines of credit. That is one way that scammers can get your information.
• Check your credit report for errors every year or once every four months from each of the credit bureaus.
• Monitor and track your debts and be sure you fully know what you owe. If your debts are a focus of your budget, you'll work to pay them down over time, eliminating any risk of scams.

Most importantly, pay attention to your finances. When you monitor the transactions on your accounts, keep your credit report updated, and read through your mail, you'll be less likely to face debt collection scams.