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.
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.
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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.