From the Better Business Bureau comes word of a new kind of “grandparent scam:” the phony debt collector.
The scam goes like this: A caller tells you that he or she works for a debt collection company or loan company. The crook claims to be trying to collect on a bad debt or overdue payments on a loan your grandchild (or child) took out. The “collector” is calling you because you are listed as a “responsible party” on the loan. Then they may ask you for your credit card number, ask you to send money via a prepaid card, or wire money through one of the services.
When you tell the person calling you that you won’t pay the debt, he starts threatening your loved one with being arrested, losing their job, or having their driver’s license suspended. This is a version of the new, higher-intimidation tactics the scammers have been using more often lately. Can you hear 3 of the 5 F.L.A.G.S. in there–fear for your loved one, guilt for not helping, and sympathy for your family member? Also notice the Dead Giveaway for a Scam of forcefulness–they’re trying to get you to pay up right away.
The important thing to remember here is that the “debt collector” has no power to do anything of the sort. The so-called “loan” or “debt” probably doesn’t even exist. Nevertheless, here are some steps to take to both respond and reach out:
1. Ask the caller to give you official “validation notice” of the debt: Real debt collectors are legally required to give the information about the debt in writing. The notice must include the amount of the debt, the full legal name of the creditor, and a statement of the debtor’s rights under the Fair Debt Collection Practices Act. If the “debt collector” won’t give you that information, hang up the phone.
2. Ask for the caller to give you their name, company, street address, and phone number. Then act on the 3rd R of scam prevention–reach out to check it out and confirm that the collection agency is for real.
3. Stop talking to the caller: Once you have their address, you can send a letter demanding that they stop contacting you. By law, real debt collectors must stop calling you if you ask them to in writing.
4. NEVER provide nor confirm any personal information, including bank account numbers or credit card information over the phone unless you have verified the call.
5. Suggest your loved one check their credit report by going to annualcreditreport.com or calling 877-322-8228.
6. Recommend your family member place a credit freeze or fraud alert on their credit report.
7. Report the call to the FTC and your state Attorney General’s office. Many states have their own laws covering debt collection practices in addition to Federal laws.