7 common lies a debt collector might tell you
lies a debt collector might tell you

7 common lies a debt collector might tell you

Keep an ear out for these red flags when dealing with shady collectors looking to part you from your money.

Ask anybody who’s worked with debt collectors about their experience, and you’re bound to hear stories that range from the uncomfortable to the implausible.

Debt collectors are trained to do one thing: Get you to pay the money you owe by any means necessary. Many of the persistent tactics they use are legal, like repeat calls and letters and offering to settle your payment with even a portion of what you owe.
But when they venture into intimidation, harassment, abuse, deception — even illegal practices — you’re protected by the Federal Trade Commission and the Fair Debt Collections Practices Act.

We’ve wrangled the top misrepresentations you might hear from aggressive collectors, along with what you can say to call their bluff.

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.

Compare debt solutions now

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.

Ready to tackle your debt? Compare your options

Laurel Road Personal Loans

Our top pick: Laurel Road Personal Loans

Get a personalized rate offer through a quick online application. Recommended for people with annual income of $60K+ and debt of less than 40% of their income.

  • Min. Credit Score Required: 680
  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $45,000
  • Starting APR: 5.5%
  • Loan Term: 3, 4 or 5 years
  • Rate discounts for autopay
  • No prepayment fees

    More debt consolidation loan options to compare

    Rates last updated April 24th, 2018

    Reveal your potential loan offers and rates

    Answer two quick questions to filter the loan offers and get the best one for you.

    Let's get started

    Select your credit score range

    I don't know my credit score

    Finally, select where you live.

    To get your credit score:

    Experian logo

    Experian is a leading provider of personal and business credit reporting. Find out your FICO score now for less than the cost of a cup of coffee.

    Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
    Name Product Product Description Min. Credit Score Max. Loan Amount APR
    Even Financial Personal Loans
    Get connected to competitive loan offers instantly from top online consumer lenders.
    580
    $100,000
    4.99%–35.99% (fixed)
    Monevo Personal Loans
    Quickly compare multiple online lenders with competitive rates depending on your credit score.
    580
    $100,000
    3.09%–35.99% (fixed)
    Upgrade Personal Loans*
    Affordable loans with two simple repayment terms and no prepayment penalties.
    620
    $50,000
    5.96%–35.97% (fixed)
    Prosper
    Borrow only what you need for debt consolidation, home improvements and more — with APRs based on overall creditworthiness.
    640
    $35,000
    5.99%–35.99% (fixed)
    LendingClub Personal Loan
    A peer-to-peer lender offering fair rates based on your credit score.
    660
    $40,000
    5.98%–35.89% (fixed)
    CompareFirst Personal Loans
    An easy-to-use loan connection service geared toward introducing first-time borrowers to affordable personal loans.
    580
    $50,000
    2.99%–36% (fixed)
    Best Egg Personal Loans
    A prime lender with multiple repayment methods.
    640
    $35,000
    5.99%–29.99% (fixed)
    FreedomPlus Personal Loans
    Consolidate debt and more with these low-interest loans. Cosigners welcome.
    640
    $35,000
    4.99%–29.99% (fixed)
    Laurel Road Personal Loans
    Get a personal loan with no application or origination fees and a rate discount for autopay.
    680
    $45,000
    5.5%–11.74% (fixed)
    LendingPoint Personal Loans
    Get a personal loan with reasonable rates even if you have a fair credit score in the 600s.
    600
    $25,000
    15.49%–34.99% (fixed)
    NetCredit Personal Loan
    Check eligibility in minutes and get a personalized quote without affecting your credit score.
    550
    $10,000
    34%–155% (fixed)
    OneMain Financial Personal and Auto Loans
    An established online and in-store lender with quick turnaround times. Poor credit is OK.
    Varies
    $25,000
    typically around 18.49%* (fixed)

    Compare up to 4 providers

    More balance transfer credit card options to compare

    Rates last updated April 24th, 2018
    Name Product Product Description Intro APR for Balance Transfer APR for Purchases ( Purchase Rate ) Annual fee Minimum Credit Score
    Blue Cash Everyday® Card from American Express
    Earn $150 back after you spend $1,000 in purchases on your new Card in your first 3 months. You will receive the $150 back in the form of a statement credit.
    0% Intro APR for 15 months (with whichever is greater, $5 or 3% balance transfer fee)
    14.49% to 25.49% variable
    $0
    Fair (660-699)
    The Chase Freedom® Unlimited™ credit card
    Earn unlimited 1.5% cash back on every purchase – it's automatic. No minimum to redeem for cash back.
    0% Intro APR for 15 billing cycles (with whichever is greater, $5 or 5% balance transfer fee)
    16.24% to 24.99% variable
    $0
    Fair (660-699)
    Chase Slate® credit card
    Jumpstart your financial fitness! 60 day introductory balance transfer offer, save on interest, and get your free monthly credit score.
    0% Intro APR for 15 billing cycles (with $0 for transfers in first 60 days. Then $5 or 5% balance transfer fee)
    16.24% to 24.99% variable
    $0
    Fair (660-699)
    BankAmericard Cash Rewards™ Credit Card
    Earn more cash back for the things you buy most.
    0% Intro APR for 12 statement closing dates (with whichever is greater, $10 or 3% balance transfer fee)
    14.49% to 24.49% variable
    $0
    Good (700-739)
    HSBC Cash Rewards Mastercard®
    Earn unlimited 1.5% cash rewards on purchases. See Rates and Fees
    0% Intro APR for first 15 months from account opening (with whichever is greater: $10 or 4% balance transfer fee)
    14.49%, 18.49% or 24.49% variable
    $0
    Fair (660-699)
    NASA Federal Platinum Advantage Rewards Credit Card
    NASA Federal Platinum Advantage Rewards Credit Card
    Enjoy perks and save money while gaining points that never expire with every purchase.
    9.9% Intro APR for 90-days
    11.40% to 17.99% variable
    $0
    Fair (660-699)
    DCU Visa® Platinum Secured Credit Card
    A great way to establish or improve your credit history.
    13.00% variable
    $0
    Poor (Below 660)
    primor® Secured Visa Gold Card
    Fast, easy application process. No processing or application fees!
    9.99% variable
    $49
    Poor (Below 660)
    Barclaycard Ring™ Mastercard®
    A low, variable APR on purchases, balance transfers and cash advances.
    10.49% variable
    $0
    Good (700-739)
    Discover it® Secured Credit Card
    2% Cashback at restaurants or gas stations on up to $1,000 in combined purchases each quarter. Plus 1% cash back on all other credit card purchases.
    10.99% Intro APR for 6 months (with the amount of each transfer, 3% balance transfer fee)
    24.49% variable
    $0
    Poor (Below 660)
    Fifth Third Secured Card
    Build, or rebuild, your credit with each purchase.
    25.49% variable
    $24
    Poor (Below 660)

    Have we missed anything in the comparison table? Tell us

    Compare up to 4 providers

    National Debt Relief

    Our top pick: National Debt Relief

    Get back on your feet with a top-rated debt relief company that works with multiple types of debt.

    • 100% money-back guarantee.
    • Works with student loan debt.
    • Professional and personal customer service.
    • Accredited by the Better Business Bureau.

      More debt settlement options to compare

      Rates last updated April 24th, 2018
      Unfortunately, none of the short term loan providers currently offer loans in your state. Learn more about short term loans in your state to find an alternative.
      Name Product Product Description Costs Requirements
      Freedom Debt Relief is a debt settlement company that works to help people with unmanageable, unsecured debt get back on their feet.
      Monthly payment based on enrolled debt, no upfront fees
      Must have at least $15,000 in unsecured debt and live in a serviced state.
      Get back on your feet with a top-rated debt relief company that works with multiple types of debt.
      18–25% 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.
      This A+ BBB-rated service offers free consultations to lower your monthly payments help you get out of debt faster.
      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.

      Compare up to 4 providers

      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.

      Kelly Waggoner

      Kelly Waggoner is a senior editor with finder.com. She's worked with publishers, magazines and nonprofits throughout New York City, including ghostwriting a how-to on copyediting for the Dummies series. Between projects, she toys with words, flips through style guides and fantasizes about the serial comma's world domination.

      Was this content helpful to you? No  Yes

      Ask an Expert

      You are about to post a question on finder.com:

      • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
      • finder.com is a financial comparison and information service, not a bank or product provider
      • We cannot provide you with personal advice or recommendations
      • Your answer might already be waiting – check previous questions below to see if yours has already been asked

      Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms and Conditions and Privacy Policy.

      US Personal Loans Offers

      Important Information*
      Even Financial Personal Loans

      Get connected to competitive loan offers instantly from top online consumer lenders.

      Prosper

      Borrow only what you need for debt consolidation, home improvements and more — with APRs based on overall creditworthiness.

      LendingClub Personal Loan

      A peer-to-peer lender offering fair rates based on your credit score.

      SoFi Personal Loan Fixed Rate (with Autopay)

      Borrow up to $100,000 with a competitive APR and no fees.

      Go to site