Denver, CO – October 5th, 2010 – The Better Business Bureau, (BBB) is warning consumers to be on the alert for scam artists posing as collectors of payday loan debts. The scammers typically call consumers and threaten them with legal action or arrest unless the victims authorize immediate payments from their bank accounts or via wire transfer.
A local man was recently contacted by what he thought was a collection agency. The caller told the man that by him not paying he was committing bank fraud and he needed to wire the money Western Union immediately.
The man almost sent the money order as instructed but the bank teller helping him suspected something was wrong. The teller ultimately discovered that the intended recipient of the money order was in a correctional facility.
“Phony debt collectors employ a variety of scare tactics in an attempt to commit theft,” said Dale Mingilton, President and CEO of the BBB Serving Denver/Boulder. “The Fair Debt Collection Practices Act (FDCPA) prohibits legitimate debt collectors from using abusive, unfair, or deceptive practices to collect from you.”
According to the Federal Trade Commission (FTC), which enforces the FDCPA, debt collectors may not use threats of violence or harm, and they are prohibited from saying that you will be arrested if you don’t pay a debt. Collection agencies in the state are also licensed and regulated by the Colorado Collection Agency Board.
The BBB urges those who receive a suspicious debt collection call to remember the following advice:
- Avoid providing personal information. Do not verify or give out personal information over the telephone, including bank account or credit card numbers.
- Demand proof. Ask for verification of the debt. Debt collectors are required to send you a written “validation notice” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, and how to proceed if you don’t think you owe the money.
- Report all suspicious behavior. Report abusive, threatening or illegal collection practices by filing complaints with the BBB, the FTC, and the Colorado Collection Agency Board.
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About the BBB
The BBB is an unbiased nonprofit organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB Accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. The BBB provides objective advice, free BBB Reliability ReportsTM on businesses and BBB Wise Giving ReportsTM on charities, and educational information on topics affecting marketplace trust. To further promote trust, your BBB also offers dispute resolution services for consumers and businesses. The first BBB was founded in 1912. Today, 125 BBBs serve communities across the U.S. and Canada. Please visit www.denver.bbb.org for more information.