By Michelle Black, CreditWriter.com
If you have ever been in the unfortunate situation of receiving a call from a debt collector, especially a third-party collection agency, then you are likely all too familiar with the stress and fear that such calls can introduce into your life. Obviously you will never find a consumer who enjoys receiving collection calls and many collection agencies are known for their unsavory collection tactics. However, in the spirit of fairness it is worth pointing out that sometimes legitimate collection agencies are vilified due to the actions of illegal or phantom debt collectors.
While not all collection agencies behave badly, there are many bad apples in the industry who do routinely use scare tactics and even illegal methods in an effort to collect outstanding debts. However, there exists a brand of criminal “debt collectors” who are infinitely worse – phantom debt collectors.
How Phantom Debt Collectors Operate
Phantom debt collectors, as these criminals are commonly called, are illegitimate “companies” who make up debts which were never really owed in the first place and try to frighten people into paying these phony accounts. They are scam artist, often very skilled at conning the unsuspecting public out of their hard earned money.
Phantom collectors are often armed with information acquired through identity theft. As a result if you ever receive a call from one of these con artists the caller may reference an account with a creditor whom you actually recognize. Next the caller will try to convince you that a payment is due or that you owe more than your legitimate balance. For example: “Remember that ABC Bank account you thought you paid off? No sir, you actually still owe a balance of $500.”
Additionally, while all phantom debt collection scams are a little different, these scam artists will always try to convey a sense of urgency and will generally threaten serious consequences if you do not pay immediately via a credit card, debit card, or wire transfer. Obviously these practices are 100% illegal.
Recognizing the Difference
Unfortunately the phantom debt collection scam is probably not going away any time soon. Due to the fact that this scam has become so common it is important to understand how to protect yourself from these would-be-predators. Here are 3 expert tips.
Matt Listro of National Credit Fixers, a 21 year credit repair industry veteran, recounts this story of his experience with a phantom debt collector:
“Our client contacted us because of a ‘fishy’ sounding collection call. When I called the collector, he identified his company as ‘Lincoln National Collection.’ All words in the company name are very common place and generic, making it hard to identify if the company actually existed. I pressed further and asked for their office location. After much stalling, I was told their offices were in downtown Los Angeles on the 22nd floor of a particular office building. A quick Google search yielded the name of a law firm located on the 22nd floor and a phone call to them documented that the law firm occupied the entire 22nd floor of the building. The law firm never heard of the ‘phantom collector.’ We turned the phantom collector in to our local state attorney general, but these phantom collectors often operate overseas and routinely change phone numbers frequently, making it difficult to catch them.”
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