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7 common lies a debt collector might tell you

Keep an ear out for these red flags when dealing with shady collectors.

Debt collectors are trained to do one thing — get you to pay the money you owe by any means necessary. But when they venture into intimidation, harassment, abuse or deception, you’re protected by the Federal Trade Commission and the Fair Debt Collections Practices Act.

1. “I’m an attorney.”

Lawyers are generally prohibited from giving advice to people they don’t represent. This is because they’re held to the rules of the American Bar Association, which says that legal advice is for clients and other secure counsel only.

If a debt collector tells you they’re an attorney and working on behalf of a debt collector, ask for their contact information and tell them you’d like to have your own counsel talk to them. Real lawyers must stop talking to you at that point.

2. “I work for the government — and can put you in jail.”

This lie offers a lot to unpack. First, with the exception of select workers who deal with unpaid taxes and child support, debt collectors typically do not work for the government. Also, while you can be ordered to appear in court for back payments, you generally can’t go to jail for not paying a loan, credit card or hospital bill. At least, not without a lawsuit.

Another red flag: The Fair Debt Collection Practice Act prevents debt collectors from threatening you with jail time.

If you get a call from a debt collector who says you’re facing jail time, ask for their contact details and then call your state’s attorney general or Federal Trade Commission to report them.

3. “I work for a credit reporting company.”

Experian, Equifax and Transunion — the three main credit reporting bureaus — do not collect debts themselves. Instead, they monitor your credit and report your repayment history to others.

If you get a call from a debt collector who claims to work for a credit bureau, take down their information, company and title. With research, you may find that they’ve distorted the facts: That the company you owe money to simply reports your credit to the bureaus.

4. “You owe much more than that.”

Debt collectors can sometimes lie about how much you owe in an attempt to get you to settle for an amount that equals or exceeds what you actually owe.

Misrepresenting the amount you owe is illegal. If you suspect that the amount you’re told you owe is not correct or inflated, ask the debt collector to provide proof of that amount.

5. “You just have to sign some paperwork.”

Shady debt collectors can attempt to intimidate you into paying with the help of paperwork designed to trap you.
Some send documents that appear to be legal or court forms but are simply scare tactics to get you to pay. On the other end of the spectrum, you could receive a simple document that looks like it’s easy to understand and sign but, in fact, is a legal contract that binds you to collection payments.

Debt collectors are prohibited from misrepresenting documentation they send to you. If you’re unsure whether a document is legit, seek the help of a lawyer. And if you find that the company you’ve heard from has lied about paperwork, report it to your state’s attorney general, the FTC and the Consumer Finance Protection Board.

6. “I’m going to garnish your wages or seize your property.”

If you don’t pay a debt, it’s possible that a debt collector will seek a court’s approval to collect it from your paycheck or property.

But that requires you to receive a summons to appear in court first. If you receive notice to appear in court, do not miss your appointment. The downside of not going can be far worse for you in the long run.

7. “I’m going to take your Social Security payments.”

Most Social Security, veterans’, civil service, federal retirement and disability benefits, including military annuities and FEMA assistance, are exempt from garnishment — or involuntary deductions — by a debt collector.

Exceptions include specific circumstances that involve repayments to the government, like taxes or federal student loans.

Debt settlement services to compare

Our top pick: Freedom Debt Relief

  • Min. Amount: $15,000
  • Requirements: Must have at least $7,500 in unsecured debt, have a hardship is preventing the ability to pay creditors, and live in a serviced state.
  • Flexible payments
  • Leader in debt negotiation
  • No upfront fees

Our top pick: Freedom Debt Relief

Freedom Debt Relief works to help people with unmanageable, unsecured debt get back on their feet.

  • Min. Amount: $15,000
  • Requirements: Must have at least $7,500 in unsecured debt, have a hardship is preventing the ability to pay creditors, and live in a serviced state.
Name Product Costs Requirements
Accredited Debt Relief
Charges and fees vary by the company you're ultimately connected with
Must be at least 18 years old and a legal US resident; additional terms may apply based on services and products used.
This A+ BBB-rated service offers free consultations to lower your monthly payments help you get out of debt faster.
National Debt Relief
15–25% of total enrolled debt
Must have a legitimate financial hardship which is preventing the ability to pay creditors and a minimum of $7,500 in debt.
Get back on your feet with a top-rated company that works with multiple types of debt.
Freedom Debt Relief
Monthly payment based on enrolled debt, no upfront fees
Must have at least $7,500 in unsecured debt, have a hardship is preventing the ability to pay creditors, and live in a serviced state.
Freedom Debt Relief works to help people with unmanageable, unsecured debt get back on their feet.

Compare up to 4 providers

Before you sign up with a debt relief company

Debt relief companies typically charge a percentage of a customer’s debt or a monthly program fee for their services. And not all companies are transparent about these costs or drawbacks that can negatively affect your credit score. Depending on the company you work with, you might pay other fees for third-party settlement services or setting up new accounts, which can leave you in a worse situation than when you signed up.

Consider alternatives before signing up with a debt relief company:

  • Payment extensions. Companies you owe may be willing to extend your payment due date or put you on a longer payment plan if you ask.
  • Nonprofit credit counseling. Look for free debt-management help from nonprofit organizations like the National Foundation for Credit Counseling.
  • Debt settlement. If you can manage to pay a portion of the bill, offer the collection agency a one-time payment as a settlement. Collection agencies are often willing to accept a lower payment on your debt to close the account.

Bottom line

If you’re contacted by a debt collector who raises your suspicions or resorts to abuse or deception in attempting to get you to pay, you have rights under the Fair Debt Collection Practices Act.

Take down their contact information and report any problems to your state attorney general’s office, the Federal Trade Commission and the Consumer Financial Protection Bureau.

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