Jan 07, 2014 Philip Burgess
Millions of Americans are the subject of debt collection efforts each year, and the vast majority have a constructive experience. In most cases, debtors are able to establish a reasonable payment plan to help their credit scores recover. However, the small portion of borrowers who have poor debt collection experiences usually get all the headlines.
One of the major factors for this is that the number of debt collection scams is on the rise across the United States. Most consumers take debt collection calls very seriously, meaning any contact from a self-described debt relief agent is often enough for a consumer to panic. For this reason, many unscrupulous individuals use this fear to take advantage of borrowers.
Fake debt collectors use aggressive tactics such as threatening legal action and using derogatory language. Under the Fair Debt Collection Practices (FDCPA), these practices are generally prohibited. However, a large number of borrowers are not aware of FDCPA policies, so it can be simple for scammers to sound convincing.
A recent report from WRDW-TV noted that these malicious individuals stop at nothing to rip off consumers. In fact, the source suggested that fake collectors are likely to ramp up their efforts during the holidays when people tend to worry about their finances. With so many gifts and airline tickets being bought during the holiday season, it can be easy for consumers to lose track of purchases, which can often result in credit defaults. To combat this issue, reputable collection agents need to make sure they are adhering to FDCPA policies and provide proof to consumers that they are indeed a verified collector.
GiGi Turner, a representative with Augusta, Ga.'s Better Business Bureau told the source that false collectors are talented individuals.
"These people are good. They can lure you, they can convince you. That's their skill," Turner told WRDW-TV.
In fact, these scammers are so proficient at what they do, that they make millions of dollars from their efforts. The Shelbyville Daily Union reported that one fake collection operation that was recently shut down was able to collect $5 million before its run came to an end.
Legitimate collection agencies are in a battle with such operations. The longer scams are allowed to go on, the greater the chances are that consumers form a negative view of the industry as a whole.
But what can collection leaders do? How do they keep scam artists from harming the sector?
The answer is intense training and education. Collection executives need to put the right programs in place to not only ensure agents understand the FDCPA, but also how to treat debtors in a respectful manner. Also, it may not be a bad idea to encourage agents to volunteer to provide a consumer proof of a debt. That way, borrowers will know that a collector is legitimate.