Beware of Phony Debt Collectors Using Fake Phone Numbers

ABC News has recently run several stories about fake debt collectors from India posing as police officers to collect phony debts from vulnerable Americans. The ABC video, which you can view by clicking on the link, contains audio recordings of illegal activity - debt collectors threatening their victims with imprisonment and public embarrassment. Several victims who paid hundreds or even thousands of dollars to the scammers explained that they sent money because the callers had personal information including addresses, dates of birth and even Social Security numbers. When you view the ABC video, you may find it hard to believe that anyone would actually believe that a heavily accented caller calling himself Officer Johnson threatening to put you “behind the bars” would fool anyone but the FBI estimates that this scam has produced over $5 million for an organized crime group in India. Many of the victims had previously borrowed money from online finance companies and law enforcement officials theorize that personal information associated with these borrowers was either stolen or sold to the scammers from India. I can report my own personal experience interacting with a debt collection scammer. About two years ago, I received a phone call on my cell phone from a male claiming to be a security officer for Bank of America and that the call was being recorded. He addressed me by name and asserted that my account had been flagged for illegal activity and that the bank was in the process of reporting me to the FBI. I responded by stating that I had no banking relationship with Bank of America - the caller brushed off my denial but told me that the bank might be prepared to “work something out with me.” I replied by asking him for his name and contact number, at which point he cursed at me and then hung up. Although I quickly realized that this call was a phishing scam I recall that my first reaction to the caller was one of intimidation and concern. As an attorney I know that deep pocketed plaintiffs can create enormous hassles for consumers and the last thing I would want to face is a criminal investigation by a state or federal agency. In my case it took about a minute for the shock of the call to wear off and for my “lawyer brain” to kick in - at which point I became more and more convinced this was a scam. However, I will tell you that I paid a visit later that day to a Bank of America branch to assure myself that this was an attempted scam. Therefore I can easily understand how an average consumer who may have accessed various second tier finance companies and online lenders might be intimidated into authorizing a bank draft by a con man. The scammers rely on intimidation and threats and will insist on immediate action - all this is designed to isolate the victim and prevent the consumer from seeking advice from a lawyer or trusted friend. So that there will be no confusion, you should always keep in mind that: there is no debtor’s prison in the United States, period. You cannot be thrown in jail for failing to pay a credit card or other consumer type of debt. A creditor cannot use the threat of criminal prosecution or imprisonment as a tactic to collect a debt our legal system is premised on the idea of full disclosure and informed decision making. If you are sued in Georgia, for example, you must be served with a copy of the lawsuit by a sheriff’s deputy or authorized process server and the law gives you 30 days to seek counsel and file an answer. If someone tells you that you have to make a decision now, with no opportunity to think about your decision to seek counsel or advice, you should be very suspicious personal information, including Social Security numbers, dates of birth, addresses, etc. are, unfortunately, easily purchased from unscrupulous data mining companies. Do not assume that a caller who has personal information about you is legitimate. It is never a good idea to conduct financial business of any type over the phone unless you are sure that the caller is who he says he is. I have a policy of never buying anything or donating anything over the phone, especially if I am the recipient of the call. Legitimate vendors and charities will not object to your suspicions. If you do intend to conduct business over the phone, verify the caller’s information independently - do not assume that the telephone number they give you is accurate. Avoid responding to demands for immediate action and say as little as possible until you have verified the caller. I made this mistake myself the other day. I was in my car and I receive a call from a woman who said that she was with a home security company and that the home alarm for an elderly relative was going off. I knew that this relative did not usually set his alarm during the day so I did not want the alarm company to dispatch the police. The caller asked me for the code to cancel the alarm and I found myself suggesting any and every code I could think of that my relative might have used - none of which was correct. In retrospect, this was foolish. It turns out that the caller was legitimate but had she not been, I would have given a stranger around ten “secret codes” that could have been used to steal money or worse. I should have pulled over to the side of the road, and asked the caller to verify her identity, including employee identification number and call back number (this type of demand usually causes scammers to hang up). If I did not know the code I should have just said so rather than offer my guesses verbally. This incident shows to me, at least, how programmed we all are to responding to purported authority figures. Never give any creditor access to your checking account over the phone. I am not a big fan of giving anyone access to my checking account at all but if you must do so, do it online or in person, but never over the phone. Finally, do not be afraid to trust your gut. If a caller does not seem legitimate to you, ask questions and demand proof of identity. Legitimate vendors and charities understand that scammers have poisoned the waters and the will not be offended if you ask for proof of identity. Con men and scammers by contrast want to give you time to think - they just want to intimidate you into turning over your money. If something does not sound or feel right, it probably is not.