A sharp increase in complaints concerning debt collection scams, particularly those impersonating law enforcement or government agencies, has the Colorado Attorney General warning consumers to be cautious of threatening phone calls and emails from fraudulent debt collectors. While debt collection scams have been prevalent in recent years, the most current schemes often use personally identifiable information, including the last four digits or even full Social Security Numbers.
The scams are typically trying to collect on an alleged payday loan debt, using variations of fictitious names that sound similar to well-known payday lenders. A few of the fictitious names include: ACS Inc., ACS Legal Group, Ace Cash Services, ACE Cash Advance, Advance Cash Services, and American Cash Advance. The familiarity in lender names, along with high-pressure demands to pay the debt immediately, strong allegation language (“Violation of Federal Banking Regulation”), use of official sounding titles and agencies (“United States of Attorney,” “State Investigation Department”), and threats of reporting your SSN to the FBI, FTC, and employers, are the most common elements found in these complaints. In some cases, fake arrest warrants are sent with the consumer’s name listed. Out of fear of prosecution, victims end up sending a “settlement amount” to the scammers via prepaid money cards to settle the alleged debt and allegations.
Legitimate law enforcement entities and government agencies do not threaten arrest or prosecution for unpaid consumer debts and would never send an arrest warrant via email.
Click here to view a few examples of scam emails.
Signs the email or phone call you received is a debt collection scam:
- Threats of arrest or prosecution
- Claims of being law enforcement or a government agency
- Strong allegation language: “Collateral Check Fraud,” “Theft by Deception”
- Typos and grammatical errors: “Court House,” “law suit,” “United Stetes of America”
- Requests amount owed be paid via prepaid card or money transfer
- Requests for personally identifiable information
- Refusal to provide a mailing address
- Refusal to mail proof of debt, referred to as a “validation notice”
Tips to avoid falling victim to a debt-collection scam:
- Ask the collector for his name, company, address, and phone number.
- Legitimate debt collectors are required to provide their contact information and the nature of the debt owed.
- Refuse to discuss any debt owed until a written “validation notice” is received.
- Within 5 days after you are first contacted, a collection agency is required to send you a written notice.
- A proper “validation notice” will include the amount of debt, the name of the creditor, and your rights under the CFDCPA.
- Do not give out any personal information.
- Fake debt collectors can use your sensitive information to commit identity theft.
- Ask for the original creditor information.
- If you believe you may owe a debt, contact your original creditor directly to find out what debt collector, if any, has purchased or may be authorized to collect the debt.
- Keep good records.
- Keep evidence of any debt you may have previously paid off.
- Maintain a file of documents and correspondences between you and any debt collector.
- Record dates and times of conversations and keep good notes.
- Do not ignore a court order.
- If you receive a court order to appear, independently verify the order by contacting the court directly.
- Consult with an attorney.
- Verify the debt collector is licensed to collect in Colorado by searching the Licensed Collection Agencies List.
While it is difficult to determine exactly how these fraudulent debt collectors are obtaining consumers’ identifiable information, many who have filed complaints have indicated taking out an unrelated payday loan in the past or filling out an online application for a payday loan, but not accepting a loan offer or even hitting the “submit” button. There are many risks to applying for an online payday loan, as most of these lenders are unlicensed and may not actually be lenders at all, but lead generators. Lead generators take the consumer inputted information and shop it around to several third-parties. The Colorado Attorney General advises consumers to verify the lender is licensed in Colorado before providing any personal information, by searching the Licensed Supervised Lenders List.
Know your rights:
The Colorado Fair Debt Collection Practices Act (CFDCPA) states that debt collectors cannot make false or misleading statements on the following:
- Amount owed
- False representation of being an investigator, law enforcement, or attorney
- False threats of arrest, imprisonment, garnishment, repossession of property or other misleading statements
A debt collector may not harass, oppress, or abuse you or any person in connection with the collection of a debt. Harassment may include:
- Threat of violence or harm to you, your reputation, or your property.
- The use of obscene or profane language.
- Publication of a list of consumers who allegedly refuse to pay debts.
- Repeatedly or continuously calling with intent to annoy, abuse, or harass.
- Calling outside of the allowable time period of 8:00am to 9:00pm.
- Not properly disclosing the caller’s identity.
A debt collector may not discuss a debt with those who do not owe it.
- Neighbors or relatives may only be contacted to obtain your address and phone number.
Please visit the Collection Agency Regulation Unit to find the full-version of the CFDCPA and related laws. If you believe you have fallen victim to a debt collection scam you may wish to file an online report.