As more Americans struggle to find their way out from under a debt burden, options begin to fade and desperation sets in. Unfortunately, this leaves way for many scam artists to make their move on unsuspecting borrowers.
Scam artists are good at what they do and they are always evolving new tricks to make their money. However, there are ways to spot them before you end up losing more money to their schemes.
Debt Collection Notice Scheme
One of the most difficult scams to detect is the debt collection notice scheme, where alleged collectors send notices or make calls to borrowers stating they owe money to the creditor. They pose as third-party collection agencies that “represent” the creditor where your account is held. Many will have some of your personal information or information about the creditor. They may send out official looking notices on what appears to be company letterhead. For all purposes, everything appears to be legitimate and real.
Here is the problem: they do not represent your creditor and have no intentions of submitting any payments to the creditor on your behalf. If you receive a call from a creditor, do not give them any personal or banking information. Instead, call your creditor directly to verify you actually owe a debt and have been put into “collection” status. Arrange a debt repayment with your creditor directly rather than make any payments through a third party collection agency.
As many college kids go off to a University for the first time they will be faced with new challenges, including preventing identity theft. Many students will have their personal information stolen by a roommate, friend or visitor. Another common problem is with first time credit card offers. Scammers are now making pre-approved credit card offer phone calls to naïve students. They request personally identifiable information in exchange for expediting a credit card application.
Many college students end up having their information taken by their own negligence or inexperience. Keep mail and personal papers in a lock box to prevent having them stolen. Never give personal information out over the phone and always verify the legitimacy of a credit card application by contacting the company directly, before the sending in any information.