There’s a scary phone scam out there involving what’s called phantom debt collection. I think we all know that debt collectors can use some pretty sketchy tactics to get people to pay up, but there are a lot of crooks out there attempting to scare people into paying debts they don’t even owe.
Often times, they’ll tack on quasi-official titles like “inspector” or “investigator” to imply that they’re with law enforcement or sometimes flat-out lie and claim to represent the IRS or even the FBI.
Not only will they call you, they’ll also go after anyone whose name has ever been associated with you including relatives, former and current employers, neighbors, friends and former spouses. Thanks to the Internet and social media, it’s easier than ever to find out just who has a connection to you.
Sometimes they have the kind of details that can make you wonder if you really did owe the money. But don’t be fooled. There are several ways they get the information.
There are companies that buy information about old debts that companies have written off. They pay a penny or less on the dollar. Sometimes just a few thousand for millions of names. Many of these companies are based overseas and don’t follow U.S. rules about what debt collectors are allowed to do. They’ll get hostile and threaten you. Sometimes this debt is decades old. A lot of times the information is inaccurate and the debt has already been paid or settled in bankruptcy. There was a recent case of a guy who made up $7.7 million in fake debt and sold it to overseas companies who then hounded the alleged debtors.
Sometimes the debt never existed in the first place. Crooks use information gathered from stolen data. This data can tell them where you have a bank account, if you’ve ever taken out a loan, how much you owe on your mortgage, what vehicles you own, and more. Armed with details relevant to your life, criminals can tell a much more convincing lie about a debt that doesn’t exist at all.
As I said, these criminals can be abusive and often make threats about lawsuits, jail, and other dire consequences. Sometimes they attempt to intimidate parents or grandparents into paying debts to keep younger folks from getting in trouble. Sometimes they try to convince people that they need to pay a debt for parents or grandparents.
So, don’t fall for it and make sure your friends and family know to watch out for it.
If you’ve been targeted by these scammers, click here to report them to the Federal Trade Commission.