Fake debt collectors want your very real moneyIt isn't bad enough that people behind on their bills have to worry about debt collectors -- now you have to be on the lookout for fake debt collectors as well.

Determining the real ones from the fake ones can be confusing because when a fake debt collector calls, sometimes they're calling about a very real past due bill.

But not always. Frequently fake debt collectors will make up debt you don't really owe, referencing a fake bill they hope will rattle you enough to make you pay up without really thinking things through. There have also been a growing number of reports of fraudulent collection agencies either buying credit information, or stealing bills out of mailboxes, and then using that information to do everything they can to make themselves look like an authentic debt collector.

Which means you could pay the fake debt collector what you actually owe and still be left in debt to the actual company you owe money to.

This fairly new problem seems to be growing. After a search of numerous newspaper archives, I've had no luck finding any mentions in the media of a case of a fake debt collector from even the mid-2000s, but I can easily find plenty starting in 2008, when the Great Recession began in earnest. And I found several examples of it happening lately.

Some of these fake debt collectors are calling people at work, where they're even more likely to be rattled, not wanting their financial problems to interrupt their job -- and thus are possibly more likely to pay up to make their problem go away. In just about all these cases, the fake collectors are abusive and often ominously authentic-sounding, telling their victims that if they don't pay up, the sheriff will be paying them a visit the next day and serving them with an arrest warrant.

Warning Signs
Some of the signs that you're dealing with a fake collection agent include getting calls before 8 a.m. or after 9 a.m., says Tisa L. Silver, a University of Delaware finance professor and author of The Time Value of Life. Debt collectors aren't allowed to do that; it's against the law. Silver also warns that if you say you're going to mail them a check and they tell you to make it out to a specific person, that's a red flag.

"Large creditors often sell off bad debts to law offices, so you may get a call from a small business [debt collector]," says Silver. "However, if someone tells you to make your check or money order payable to 'John Smith,' then they're probably fake."

When a collector -- real or not -- reaches you by phone, try to be calm, offers John Buzzard, the clients relations manager for the Card Alert Service at FICO, the company that, among other things, developed the FICO credit score. "You just have to tell them, very calmly, 'I'm going to have to look into this a bit," says Buzzard.

That may be hard to do if you're being yelled at and told you're going to be handcuffed if you don't pay immediately, but the meaner the person gets, the more reason for you to be calm -- and suspicious. As Silver says, "Creditors aren't supposed to threaten you at all. Intermediates may visit you on behalf of a creditor -- for example, a tow truck may come to repossess your car or you may get served with legal documents -- but creditors typically stick to calling your home, not making house calls."

And if you do get threatened, Buzzard says you should report the collector, whether they turn out to be real or fake, to your state's Attorney General's office. (You can find your Attorney General's contact info on this page.)

But back to remaining calm. "There are questions everyone should ask," says Buzzard. "You should ask, 'What company are you calling from again?' And take notes because most of the time, they'll garble that information or make something up that's bogus but sounds official. And don't confirm anything," stresses Buzzard.

That can be difficult, of course. You're likely to confirm your name the moment you answer the phone, and confirming an address or phone number is almost second nature. But try to resist confirming anything else because Buzzard is right: If you're dealing with a fake debt collector, they're not just trying to get you to send them money, they'll looking for information they can use to get into your bank account, take a loan out in your name or secure a credit card through you. They're looking for any information that can make them rich and financially destroy you.

"If these criminals are in possession of parts of your identity, bits and pieces that they've gathered online, anything you tell them will help them," says Buzzard. "So confirm absolutely nothing. If they ask you what your Social Security number is, just say, 'Sorry, I can't confirm that right now.' And, you know, if things get really unusual and stressful, tell them to put the debt in writing and mail it to you. But if you do that, don't give them your address," warns Buzzard. "An authentic debt collector will have your address.

"I truly think in my heart of hearts that there isn't a true debt collector that's going to go kamikaze on you," says Buzzard, "where suddenly out of the blue, they call you about a debt you've never heard of. We all know who we owe, whether we admit it or not, and when they reach out to us, it's okay to say, 'I'm going to have to call you back.' We have plenty of resources to find these debt collectors, if they're real. If someone gives you a telephone number, you can call the company on your own and ask if they've been trying to reach you."

And Buzzard points out that there's such a thing as the Fair Debt Collection Practices Act. Passed in 1978, this law makes it clear that people who owe money aren't to be treated like common criminals. "You know how it is when you have a financial obligation," says Buzzard. "There's that instant guilt, where you feel you need to be somewhat subservient to those you owe money to when in reality, you have rights as a consumer."

Geoff Williams is a frequent contributor to WalletPop. He is also the co-author of the book Living Well with Bad Credit.

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