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How to Handle a Fake Debt Collector

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Mark Cappel
UpdatedMay 20, 2024
Key Takeaways:
  • Just because a voice on the telephone claims you owe a debt does not mean you do.
  • A debtor should, as a matter of course, validate a debt.
  • Until a debt is validated, assume you are dealing with a fake debt collector.

I receive threatening phone calls about a debt I know I do not owe from a person with a heavy foreign accent. What can I do?

I have been receiving phone calls, from a supposed "law firm" that is collecting from a payday loan that I received in October 2009, I do not recall receiving this loan. I even went to my bank and asked them to look on my account for that month, they said there was not a deposit from any company for that amount. When the "law firm" called me back, I told them the information i had gotten from the bank. She said that I had probably manipulated the documents. She wanted me to send her money, and was charging me for an affidavit fee? I then received a phone call from the collection agency, who was only charging me for the original debt, which I still don't know that I owe, so I sent them a payment of 100.00. By the way all of the people that I have spoken to at the "law firm", are foreign and very hard to understand, and have fictitious names like, Jenny Smith and Dean Jones! When I told the law firm that I was paying to the original lender, they freaked out and said that under the law of my state I am not allowed to pay a collection agency for this debt. What is going on? She then advised me that she was downloading the affidavit on Monday and they would get their money in court! Pleas help me, these people scare me to death!

Editor’s noteSince this was published originally in 2010, received a wave of messages from readers with facts similar to this reader’s. Apparently, this is a common phenomenon, which prompted the attorneys general of Alabama and Arizona, and Illinois, and North Dakota, and Washington to issue separate press releases warning residents in their states to not heed calls from fake debt debt collectors. Update: On February 21, 2012, the FTC announced Court Halts Alleged Fake Debt Collector Calls from India, Grants FTC Request to Stop Defendants Who Often Posed as Law Enforcement. See these links to learn more about fake payday lenders.

Just because a voice on the telephone claims you owe a debt does not mean you owe it. You may not be required to pay a debt even if the voice on the telephone claims to be an attorney or work for a law firm. An abusive, screaming voice that claims you will be subjected to incomprehensible legal proceedings does not mean the person is truthful or accurate.

In general, do not believe legal advice offered by creditors or collection agencies, even if they call themselves lawyers. The legal advice provided by collection agents is usually wrong or incomplete, and is always self-serving.

Take these four steps if a voice on the telephone claims you owe a debt:

  1. Understand your rights
  2. Demand the person give you his or her name, company name, and address
  3. Send the collection agent a cease-communication letter
  4. Validate the debt

Fair Debt Collection Practices Act (FDCPA)

Section 802(e) of the FDCPA reads, "It is the purpose of this title to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses."

Section 803(1) defines a debt collector. "The term ‘debt collector’ means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another."

There is no exclusion for law firms or payday loan organizations under the FDCPA. In other words, the FDCPA applies to all creditors and agents seeking to collect a debt.

Under the FDCPA, you have a right to demand that the collection agent cease to communicate with you using the telephone. If the caller harasses you or continues to misrepresent themselves or the law, you may have a cause of action against the creditor. ("Cause of action" is lawyer-speak meaning you have a darned good basis for a lawsuit.) Consult with an attorney in your state to discuss this possibility. To learn more about the FDCPA and your rights as a consumer, visit’s Fair Debt Collection Practices Act page.

Cease Communications Demand

Send a letter to the caller and demand they cease communications with you. Go to the Debt Self-Help Center for a sample cease-communications letter that you can adapt for your needs.

If you have problems paying your credit card debts, consult with a debt resolution partner who can discuss your options.

Validate the Debt

If a collection agent demands payment of a debt an individual does not owe, or more than they owe, under federal law the individual can dispute the debt in writing. The formal terms for this process are "debt verification" or "debt validation."

A debtor should, as a matter of course, validate a debt when a collection agent attempts to collect the debt. Why? Just because a voice on the telephone claims that a debtor owes the collection agent money does not necessarily mean the collection agent owns the right to collect the debt, or that the debt is even owed.

See the resource Debt Validation to learn more about this process.

Fake Debt Collector Recommendation

Do not pay the law firm or the collection agent another dime until the debt is validated. Given the facts you presented, you have been the victim of a scam.

The next time the collection agent or person claiming to be an attorney contacts you again, get their contact information (which I mentioned above) and bring this information to your local police to report that you have been the victim of a fraud. Then go to the FTC complaint form and enter all of the information you have about both parties. If the FTC receives enough complaints about these parties it will launch an investigation, which may eventually put them out of business.

Next, go to the local court house that handles small claims in your county and get the forms for filing a small-claims against the collection agent that you sent the payment to.

Consult with an attorney in your state who has experience in consumer law if you have questions about your situation. Also see the FTC page Who’s Calling? That Debt Collector Could Be a Fake to learn more.

I hope this information helps you Find. Learn & Save.



Did you know?

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Auto loan debt was $1.607 trillion and credit card was $1.129 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%.

Each state has its rate of delinquency and share of debts in collections. For example, in Arkansas credit card delinquency rate was 5%, and the median credit card debt was $407.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.



BBrandon, Jun, 2013
I have never had problems with collectors because I try to pay all the money in advance. After reading the article I realized that we have to be more careful when applying for various loans. Thanks the author for the useful information.
BBill, May, 2010
Debtors have not been imprisoned in the US since the Civil War. Being in debt is not a criminal offense anywhere in the US. If a debtor fails to repay a debt, the only remedy creditors have is in the civil -- not criminal -- court. The remedies to debt are wage garnishment, levy, and lien. See the resource Collection Advice to learn more about these three remedies.
SSusan, May, 2010
A collection agency keeps threatening to have me arrested if I do not pay a debt that they claim I owe. It is really starting to scare me and I'm not sure what to do. Does anyone have any advice?