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Debt Collectors’ Tough Tactics Under Consumer Agency Scrutiny

According to an NBCNews.com story, Approximately 30 million Americans have a debt subject to collection. Many of these people insist they do not owe the debt attributed to them.

upset-phone-5Whether they actually owe the debt or not, it is indisputable that the tactics of debt collectors have taken a turn toward cruel and criminally dishonest.  Evidence of this is the fact that the Better Business Bureau (BBB) has released a warning of debt collection phone scams.  There are two major types of scams that consumers should be on the lookout for.

The first scam involves the unscrupulous debt collection agency calling consumers and informing them that they would be arrested by local law enforcement if they did not immediately remit payment for a payday loan they took out months or even years ago.

In most cases, these consumers have never taken out this type of loan. However, the BBB has received reports of people paying hundreds of dollars to avoid the possibility of arrest.

I’m not an attorney or a law enforcement officer but I’m going to wager that before you get “arrested” for an unpaid bill (not that you can anyway) that you would be served some sort of paper work from the local court system to pay your debt or appear in court.  …again, this doesn’t happen for consumer debt.  But a lot of people are gullible and believe what some official sounding person on the other end of the telephone tells them.  It’s a shame.

The second type of scam, not always perpetrated by a collection agency, just someone posing as a collection company, involves scammers having the consumers reveal personal information in order to trap them in a phishing scam. The fake collectors call and/or leave a message informing the resident that they are a collection agency trying to collect a debt.

When the consumer returns the call, they are instructed to enter their Social Security number into an automated system in order to continue the process and speak to a live representative.  This leaves them wide open for identity theft.

After they enter the social security number, the scammers then try to talk the consumer into making an immediate payment but by using their bank account or credit card, opening them up even more for identity theft.

Scams and mistreatment like this is why the newly created Consumer Financial Protection Bureau (CFPB) has now been tasked to oversee debt collectors.  The CFPB will oversee any firm that has more than $10 million in annual receipts from consumer debt collection activities. This authority will extend to about 175 debt collectors, which account for over 60 percent of the industry’s annual receipts in the consumer debt collection market.

I have a feeling that while this measure may lead to curbing unethical tactics by the major debt collection companies, the smaller agencies, likely the ones who would use such despicable tactics, will be off the CFPB’s radar.  I guess time will tell.

Of course there is a sure fire way to avoid being victim to one of these debt collection scams…

Of course there is a sure fire way to avoid being victim to one of these debt collection scams, don’t have any debt!  …or never answer the phone (that’s what I do).  If you are in debt and the situation is getting worse and you are finding yourself on the receiving end of relentless collection calls, I think it’s time to get some help don’t you?

You need a professional to help you get through this difficult financial time and establish a debt relief program. The professionals at DebtHelper.com can explain the benefits of a debt management program and provide you with a fresh start.

One of the biggest long-term benefits of the debt management plan is the reduction in interest. Reduced interest allows you to pay off your principal balances faster while saving you possibly thousands of dollars in finance charges.

In order to determine if you are eligible for a debt management program, you can fill out an online budget application form now and then you can contact one of their Certified Personal Finance Counselors© at (800) 920-2262.

DebtHelper.com can currently accept clients from the states listed here. DebtHelper.com is licensed, insured and complies with all state licensing requirements to ensure mandated regulations are followed. They are diligently working on becoming licensed in every state and are opening new states monthly.

Please call (800) 920-2262 if you have any questions. DebtHelper.com’s consultations are free, call them any time.

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