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Media > Newsletters > Consumer Advocate > July 2014 > How to Avoid Debt-Collection Scams

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How to Avoid Debt-Collection Scams

Complaints filed with the Ohio Attorney General’s Office suggest that scammers continue to contact military families and other Ohioans with phony debt-collection ploys. Recently, people who have applied for or inquired into payday loans have been targeted.

Using information possibly obtained from online payday loan applications, the scammers attempt to trick consumers into paying for loans they may never have taken out or have already paid off.
Phony debt collection scams aren’t limited to payday loans. The Ohio Attorney General’s Office has also received complaints about phony debt collections for utilities. In this scam, “debt collectors” contact consumers or businesses and threaten to shut off utilities if a payment isn’t immediately sent via wire-transfer or prepaid credit card.
Fortunately, many consumers notice one or more signs that the tactic is a scam and avoid getting duped into paying for loans they do not owe. A debt collection call may not be legitimate if the caller:
  • Requests personal information, such as a consumer’s name, address, credit or debit card number, bank account number, or Social Security number
  • Requests payment via wire transfer or a pre-paid money card
  • Refuses to provide specific information regarding the alleged debt
  • Uses vulgar language or threatens arrest if payment isn’t immediately provided
If a third-party debt collector contacts you about a debt you supposedly owe, you have a number of legal rights, such as those provided under the Fair Debt Collection Practices Act. For example, a third-party debt collector must send a letter within five days after contacting the consumer by phone. The letter must specify the amount of money owed, the lender the debt is owed to, and the amount of time the consumer has to dispute the debt.
Third-party debt collectors also cannot contact consumers without identifying themselves, tell others about the debt, or contact consumers at work if they or their employer disapprove.
If you suspect a scam or an unfair business practice, report it to the Ohio Attorney General’s Office at or 800-282-0515.