News & Resources

How telephone scams affect debt collectors, consumers

Feb 12, 2015 Philip Burgess

Debt collectors face the challenge of overcoming two obstacles - proving their worth to the public and differentiating themselves from the con-men who pose in their place. It can be difficult for those in the business to be seen as assisting the public when their only interaction with consumers is collecting the money they owe. With scammers on the rise, it makes this relationship even more strained.

Increase in scams and victims
A report by the National Consumers League found that refund and recovery scams jumped by 6.23 percent in 2014, based on the 10,000 complaints reported. The majority of these scam methods are conducted over the telephone, with 42 percent of the accusations citing that as the interaction type.

"Fraud remains one of the most pernicious threats facing consumers today," said NCL Executive Director Sally Greenberg. "We are particularly concerned about scammers increasingly relying on the 'old-fashioned' telephone as a way to reach millions of potentially vulnerable consumers."

According to the report, the victims falling for these scams are using safer methods when transferring money. Wire transfer was originally the popular method of paying scammers, but now, more victims have been rewarding them by credit card. This payment method is often easy to cancel, so those affected may not lose the money.

How scammers work and threaten
Debt collectors commonly use telephones to contact debtors. All the scams being conducted by phone prove detrimental to these professionals, as consumers are likely to be much more suspicious about who they are talking to and the money owed.

Credit and Collection News reported a scam conducted last October by Juan Cuya, who targeted Spanish speakers and scammed them over the phone. He threatened them with jail, negative marks on consumer credit reports, property confiscation, litigation and community service. While debt collectors don't use these extreme methods when they're on the phone with consumers, the perception the public has of scammers and professionals has begun to blur because of criminals like Cuya.

The source recommended ways consumers can determine a scammer from professionals. These tactics are what debt collectors have to deal with on the phone. The public has become suspicious of any person asking for money on the other end of the line, which might make them more tight-lipped than they have to be with a professional.

Debt collectors have to learn to overcome these obstacles by being open about their own information and company. They have to use strategies for dealing with customers over the phone, and convince them about the legitimate collection agency looking to assist a company in getting its money back.