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Collection Agency Scams

Collection Agency Scams
Mark Cappel
UpdatedApr 5, 2024
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    6 min read

8 Steps to Take to Handle Collection Agency Scams

If a collection agent shows any one of these four signs, then it is likely you are dealing with a scam artist:

Threats of Arrest

The first warning sign is a claim the collection agency will have you arrested. Or, it may claim its employees are law enforcement. Or, it tries to scare you into paying with threats of violence. It is a violation of federal law, the Fair Debt Collection Practices Act (FDCPA), for a debt collector to threaten physical harm, criminal action, or government authority. Unscrupulous collection agents and con artists make threats. Honest collection agents follow the law and do not rely on baseless threats of violence or arrest. Remember that only district attorneys and prosecutors decide who to charge with a crime. You, I, or collection agents are not district attorneys or prosecutors, and we do not have the power to charge anyone with a crime.

Collect a Debt You Do Not Recognize

Scam artists will try to collect a debt you do not recognize. Under the FDCPA, you have the right to ask a debt collector to verify the debt. See the debt validation article to learn how to request a debt validation properly. Ask for an explanation in writing before you pay an old debt. A debt that cannot be validated cannot be collected. According to the FTC, collection agents cannot validate most old debts, so it is worth your time to validate a debt.

Refusal to Give You Information

If the collection agent refuses to give you his or her employer’s name, address, and telephone number, then you are almost certainly dealing with a dishonest person. Honest collection agents will give you information you need to send them a debt validation notice.

The Caller Asks For Sensitive Financial or Personal Information

Never provide anyone with your personal financial information unless you are sure they are legitimate. If the caller’s first question to you is your complete Social Security number, your street address if you have not moved in many years, or the correct spelling of your name, then it is unlikely the caller knows who you really are and has information about your debt.

Collection Agency Scam: Now What?

If you think a caller is a fake debt collector or scam artist, take these eight steps:

1. Gather Information

Demand the caller give you his or her:

  • Name
  • Employer company name
  • Street address
  • Telephone number
  • His or her state's collection agent license number

Not all states require debt collectors to be licensed, but your state might. Check with your state attorney general’s office to learn if collection agents must be licensed. If collection agents must be licensed in your state, cross-check the information the caller provided you, and the state in which the debt collector has a license.

Callers who cannot provide you with information about his or her company, or if you can’t verify the information provided, it is likely you are dealing with a scam artist.

2. Turn The Tables On The Caller, Part 1

If the caller claims to be a law enforcement officer, ask for specific information about the officer:

  • Name
  • Law enforcement agency name
  • Street address
  • Telephone number
  • Badge number

Thank the caller politely, hang-up, and then go online to learn if that law enforcement agency has a matching address and telephone number. If the caller is a legitimate law enforcement officer, the telephone number may be slightly different. Call the law enforcement agency’s general number and ask to be connected to the officer you were speaking to. If there is no officer at that agency, you just uncovered a scammer.

3. Turn The Tables On The Caller, Part 2

If the caller says it is taking you to court, ask for the case number and court it is filed in. Then call the court or visit that court’s Web site to learn if you can confirm a case with that number exists. If there is no case with that number, or the case number has a case unrelated to you, then you just uncovered a scammer.

Struggling with debt? Contact one of’s pre-screened debt providers for a free, no-hassle debt relief quote.

4. Validate the Debt

Follow the instructions to validate the debt, as mentioned earlier. You have a limited amount of time to validate a debt, so move quickly when you are contacted by a collection agent.

5. Do Not Volunteer Your Personal Information

Legitimate collection agents have no need for your Social Security number, or account numbers for your bank, credit card, or debit card. Scam artists can use this information to commit identity theft. In fact, a caller may act like a collection agent to obtain enough information to steal your identity.

6. Ask the Original Creditor

If you know the debt is real but you think the collector may not be, contact the original creditor. Share the information you have about the suspicious calls and find out who, if anyone, the creditor has authorized to collect the debt. However, this is not a foolproof tactic. Sometimes, original creditors hire collection agents to collect delinquent accounts. If the original creditor hired the collection agent, then the original creditor can tell you if the collection agent is legitimate.

Original creditors will sell collection accounts to brokers, who then sell the accounts to collection agents. If the original creditor sold your account, it will probably have no earthly clue who owns your collection account today. If it sold your account, contacting a collection agent will not give you helpful information.

7. Report the Call to the FTC and Your State Attorney General

Submit a complaint with the Federal Trade Commission and your state attorney general’s office. See the table on this page that contains a list of where to file complaints with your attorney general. You may not get immediate relief by filing complaints, but the more consumers who file detailed complaints about scam artists the more likely it is law enforcement will act and shut them down.

8. Hang Up and Send a Cease Communication Notice

If nothing else works, send a letter demanding the caller stop contacting you. has a sample cease communications notice you can adapt to your use. Debt collectors must, under the FDCPA, stop calling you if you ask them to do so in writing.

Bills Action Plan

When a bogus collection calls you, take these eight steps:

  1. Gather Information
  2. Turn The Tables On The Caller, Part 1
  3. Turn The Tables On The Caller, Part 2
  4. Validate the Debt
  5. Do Not Give the Caller Your Personal Information
  6. Ask the Original Creditor (This Is Not Always Helpful)
  7. Report the Call to the FTC and Your State Attorney General
  8. Hang Up and Send a Cease Communication Notice

Did you know?

Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Housing debt totaled $12.612 trillion and non-housing debt was $4.891 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

The amount of debt and debt in collections vary by state. For example, in South Carolina, 37% have any kind of debt in collections and the median debt in collections is $2026. Medical debt is common and 22% have that in collections. The median medical debt in collections is $860.

While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.