5 common debt collector scams

Learn how to avoid them and what to do if you think you're being scammed.


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Not sure if a debt collector is legit? Fake debt collection companies might be more prevalent than you think and could cost you if you’re not careful. You can protect yourself by looking out for common scams and reporting suspicious companies to prevent them from targeting anyone else.

Top debt collection scams

Fake debt collectors try to trick you into paying off debts you’ve never actually taken out. One of the biggest dangers is that they might sound legitimate. Many use the names of real businesses — or names that sound similar to real businesses you might even have an account with.

Here are some common debt collector scams to look out for:

CRA tax collector scam

  • What it is: Someone posing as an CRA employee says you owe taxes and demands payment — usually with a credit, debit or prepaid debit card. Often, they threaten you with jail time.
  • How to recognize it: The CRA has clear reasons why they would call you. Any caller that contacts you about tax debt you’re unaware of, demands immediate repayment, threatens to call law enforcement or doesn’t give you the opportunity to appeal is acting illegally. The CRA never asks for any credit or debit card numbers over the phone.
  • What to do: Hang up and don’t give the caller any personal information. If you think you might have tax debt, you can check your tax account information on the CRA website, where you’ll also find payment options. Or call 1-888-863-8657 and verify the CRA did actually contact you.

Wire transfer scam

  • What it is: A debt collector calls you, says you owe money and demands repayment by wire transfer, rather than by cheque or online.
  • How to recognize it: The debt collector only allows you to make repayment through a wire transfer and doesn’t give other options.
  • What to do: Hang up and don’t make the transfer. If you’re not sure it’s a scam, contact your creditors to check if your account has been transferred to collections. If it has, ask for the collection agency’s contact information.

Credit bureau collection scam

  • What it is: Someone claims they work for one of the two major credit bureaus — Equifax or TransUnion — and tells you they’re collecting debt you owe.
  • How to recognize it: Anyone who says you need to pay off debt through a credit bureau is scamming you. None of them collect repayments.
  • What to do: Get the person’s name, title and general information about the company they claim to work for before hanging up — this makes it easier to report. Don’t give out any personal information.

Fake government official scam

  • What it is: Someone claims they work for a government agency and says you owe them money, often threatening you with jail time.
  • How to recognize it: With the exception of agencies like the CRA, most government agencies don’t collect money from private individuals.
  • What to do: Ask which agency they work for, their name and position before hanging up. Then report them to your provincial consumer protection agency.

Phishing scam

  • What it is: Someone poses as an employee of a debt collection company to get personal information like your Social Insurance Number (SIN) to steal your identity.
  • How to recognize it: They ask for information you normally wouldn’t give out, telling you your record is incomplete or that they want to double-check the information they have is correct.
  • What to do: Hang up immediately without giving out or confirming anything. Contact your creditors to make sure your debt is not in collections and that your personal information is up to date.

How can I tell if this attempt by an agency is legit?

Sometimes it’s unclear if a debt collector is the real deal. If you’re not sure an agency is legit, take these steps to double-check.

  • Verify the collection agency exists. Check with the Better Business Bureau or your provincial or territorial consumer affairs office.
  • Ask for a validation notice. You can request validation or verification of the debt to make sure it’s legitimate and that you’re the person the collection agency is actually looking for.
  • Get their name and contact information. You can use this information to make sure everything checks out — or to give a more detailed complaint if it doesn’t. Information should include their name, address, web address, and phone number.
  • Contact your creditors. Sometimes debt collectors lie to get you to pay quicker. Ask if any of your accounts have gone to collections. If they have, ask for the name and contact information of the collection company and reach out yourself.

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What can I do if I’ve been scammed?

If you’re a victim of a debt collection scam, your main recourse for resolving the situation is to file reports against the company. You might be able to resolve the issue while also helping others avoid that scam.

Bottom line

While provincial and territorial laws protect consumers against debt collectors, scammers are still out there. Familiarizing yourself with common tricks and knowing the law are the best steps you can take to prevent yourself from becoming a victim.

Learn more about managing your debt and how to get rid of it with our guide.

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