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5 common debt collector scams

Plus learn how to spot a fake debt collector.

Common debt collection scams Learn more
Need help getting out of debt? Consider debt relief

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.

Collection agency 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 do I spot a fake debt collector?

These days, putting your number on the Do Not Call Registry may not be enough to keep the calls from coming. If you’re getting these types of calls, you might want to look out for a few telltale signs that it’s not legit and avoid giving out your personal information.

Most commonly used area codes by fake debt collectors

You don’t need to pick up the phone to spot a fake debt collector. You can often tell a call is spam just by looking at the phone number. However, fake debt collectors and other scammers often disguise numbers they call from as private individuals to avoid being blocked.

According to Hiya, these are the most common area codes where spam calls originate from:

Area codeComing from
647Toronto
416Ontario
519Southwestern Ontario
604Vancouver
780Edmonton
403Alberta
514Montreal
905Hamilton
778British Columbia
613Ottawa

Who is most likely to be researching debt collector scams?

Finder data suggests that men aged 45-54 are most likely to be researching this topic.

ResponseMale (%)Female (%)
65+9.87%6.23%
55-649.87%6.93%
45-5410.93%9.05%
35-447.99%8.23%
25-349.28%7.87%
18-248.46%5.29%
Source: Finder sample of 851 visitors using demographics data from Google Analytics

How do I know if they’re legit or a scam?

Ask yourself the following questions if you’re not sure whether you’re speaking to a reputable debt collector:

  • Who’s calling? Take into consideration the company the caller works for, their contact information and where the debt originally came from. If they can’t give you that information or you don’t recognize the names of any of the companies mentioned, you might be talking to a debt collection scammer. You can verify the agency exists by checking your Provincial or Territorial Consumer Affairs Offices. You can use the debt collector’s contact 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.
  • Why are they calling? Even if you have an account with the creditor the caller mentions, ask for more details. If you can log in online to verify the information they’re giving you, do so before continuing the conversation. You can also try calling the number you already have on file for that company to check the information and make sure that the caller wasn’t impersonating the company.
  • Are they speaking fast? One telltale sign of a scammer is that they don’t let you get a word in. If you’re talking to someone who won’t answer your questions or is speaking in a threatening manner, hang up.
  • Are they asking me about personal information? Many legit companies won’t ask for information like your Social Insurance Number, date of birth or credit account numbers over the phone — especially if it’s your first point of contact.
  • Can they provide a validation notice? Collectors are legally required to notify in writing or show they have made a reasonable effort to let you know that you owe them money. 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.
  • Are they threatening me with jail? Debt collectors are not allowed to use threatening language, which includes threatening police involvement or jail time. The Canada Revenue Agency (CRA) states that it will never threaten you with a jail sentence.
  • Does the collection agency exist? Check with the Better Business Bureau or your provincial or territorial consumer affairs office.
  • What do my creditors have to say? Sometimes debt collectors lie to get you to pay quicker. Ask your creditor 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.

Afterwards, consider checking your credit report and credit accounts to make sure none of your bills are actually in collections. If you notice a problem or an error, reach out to your creditors as soon as possible. Or if your account really is in collections, reach out to the debt collection company.

Be wary of local numbers

In addition to the area codes listed above, you might have gotten debt collector calls from a number that looks a lot like yours. This is called neighbor spoofing, where a scammer uses technology to make it look like up to the first six digits of your phone number.

The idea is that you’ll be more likely to answer if you think it’s someone in your area. Typically, it’s not. If you get a call from a number suspiciously like yours, you might want to let it go to voicemail.

How do I stop these numbers from calling me?

Unfortunately, there’s no way to absolutely stop receiving these calls. However, there are a few steps you can take to minimize the number of debt collector scam calls you receive.

Sign up for the Do Not Call Registry

You can register your phone to block all telemarketing calls Canada’s Do Not Call List. While it won’t block calls from companies that use number mimicking software, it makes it illegal for telemarketers to contact you.

Use a call blocking app

Apps like Robokiller go a step further than the Do Not Call List by preventing numbers that appear to be spam from coming through. Some even have recordings you can play to waste spam callers’ time. But it’s not always free — you might have to pay a monthly or annual fee to use the service.

Report to the Canadian Anti-Fraud Centre

You can file a report against fake debt collectors to the Canadian Anti-Fraud Centre through its website, or by calling 1-888-495-8501. This might not prevent you from getting spam calls directly. But reporting these callers to the Canadian Anti-Fraud Centre gives them data they can use to fight fake debt collectors. You might not see results right away, but it could help us all fight spam and scam callers in the long run.

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.

See if a debt relief company is right for you

Do you need help getting out of debt and want to stop the collection calls entirely? Consider if using a debt relief company is right for you.

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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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