– [Nicole Protect yourself
from these three common debt collection scams. I’m Nicole from LowIncomeRelief.com. We help low income people
save money and get free stuff. Be sure to subscribe to our channel and enable those notifications
so you never miss a video. Debt collection scams are very common. Debt collection loss has
very specific guidelines about what debt collectors
can and cannot do. Usually though, debt collectors
don’t know or don’t care. They don’t have a lot of
incentive to follow the law. Collection agencies make millions, even billions of dollars
from breaking the law. When they do get sued or
penalized, the amount they pay is a pittance compared to how much they’ve earned from these scams. We can’t change the industry overnight, but we can learn how
to stop debt collectors from manipulating us with their scams. It’s important to know
how to protect yourself against fraud and abuse and that’s what we’re gonna teach you about today. Scam one, you’re contacted by someone who says they need to
serve legal papers on you. This scam has actually happened to me personally several times. The scam usually goes something like this. You’ll get a call out of the
blue from a restricted number. They’ll say their name
and something like Jim and they’re calling from a really common and official sounding
legal service provider. And they’ll say they have court paperwork that they need to serve you with today. You’ll respond confused
and the person calling you won’t offer you any information. They’ll just say I have to get
you these papers right away. I can’t tell you anything else. You’re gonna need to call this other phone number for more information. Now there are a lot of red
flags in this situation because real process
servers who are serving real legal paperwork do not
call in advance to tip you off. If you’re being served a real lawsuit, they’re just gonna show
up at your address. They’re not gonna call you. So if you get a call from
someone that’s claiming that they need to deliver
legal paperwork to you, you should automatically
be very skeptical. Even though I already knew
this, I’m a very curious person so I went ahead and called
the number that I was given by the alleged process server and I spoke to a
representative named Robert who claimed I was being
sued for an old loan that I had totally forgotten about. Anyway he said I had to pay the amount before the legal server arrived or I wouldn’t be able
to avoid the lawsuit, I’d end up in jail, my
life would be ruined, blah, blah, blah. Knowing what I know about
how the debt process works, I asked a lot of questions that clearly made Robert uncomfortable. He eventually placed
me on an extended hold during which I did some Google searches and discovered that the company he claimed to represent didn’t even exist. Anyway this scam has happened to me at least three times in the last year and every time, it
basically works like this. First a debt collector claims to be a process server and they call you. They say that they’re going to
serve legal paperwork on you and they try to scare you. Next, you’re scared so you call the number that they’ve given you and when
you finally make that call, another debt collector who’s
probably sitting right next to the first guy hypes
up the alleged lawsuit and insists that you have to cooperate or all of these bad things
are gonna happen to you. All of this pressure
in the short timeframe are designed to scare you
into paying immediately and without question even if
the debt is completely invalid. I have safely ignored this scam every time I’ve encountered
it and you know what, I’ve never been sued because of it. I wasn’t even served and it’s a violation of debt collection law
because debt collectors are not allowed to threaten
to sue you when they do not have any intention of actually doing it. Scam number two, the debt collector claims you’ll be arrested or
jailed for not paying. You cannot be arrested simply because you cannot afford a debt. Debts are a civil matter,
not a criminal one. Sometimes debt collectors
impersonate as police officers or even FBI agents, but
law enforcement personnel do not collect on debt. Dateline once covered
how some debt collectors pose as law enforcement. Sometimes they’ll claim that
felony charges have been made or say that warrants have been issued. So it’s important to know
that you cannot be arrested simply because you did not pay a debt. If someone contacts you
and claims to work for a law enforcement agency, write
their name down and hang up. Call the agency back directly
at their published number and you’ll most likely find that you cannot locate
the person who called you. Scam number three, zombie
debt that just won’t die. Zombie debt earned its
name because it comes back again and again and again even after you think it’s been dealt with. These debts are created because companies extract as much money as they can and then they sell the remaining debt to another company. The new company tries
to get the rest from you and they sell whatever
remains to another company. The market of debt buying and
selling is a complete mess. In many cases, debts are
bundled together and sold as is. The seller acknowledged
that there might be faults in the paperwork, but
buyers still buy them. Why because they pay just
pennies on the dollar and the opportunity for returns are huge. Buyers of zombie debt
usually have little more than a main contact information
and an alleged amount owed. They usually can’t verify the debt because they lack the necessary paperwork to pursue the case in court, but they’ll never tell you
that when they contact you. Instead, you’ll find
zombie debt popping up on your credit report
again and again and again. Sometimes it’ll persist after the original statute
of limitations has passed and if you make a voluntary payment, you can reset the statute of limitations and accidentally validate that debt. If you receive a collections
notice or call for an old debt that may be close to or past
the state of limitations, do not pay it. Check the dates first to
see if you’re being tricked into turning a time-barred
debt into a zombie debt. The best way to fight zombie debt is to submit a written demand for the debt collection company to verify their rights
to collect on that debt. There is certain paperwork
that they have to maintain in order to legally collect. One of those things is a valid
unbroken chain of assignment that shows all the companies
that have owned that debt all the way back to the original creditor. If they can’t show you that paperwork, the debt is not valid and
you should not pay it. You can also request to have invalid debt removed from your credit report. So what should you do if you’re the victim of one of these scams? The most important thing you
can do is to always document your interaction with debt collectors. By law, they have to identify
themselves when they call you. Always take notes when you
speak with a debt collector. You should always write down
the debt collector’s name and the collection agency’s name. Get the company’s contact information. Be sure to ask who the
original creditor was, what the original balance was and what the current balance is. If there’s a difference in
the amount owed, ask why. You should also document the time, date and duration of each call. Another thing you should write down is any suspected debt law violation that occurs when you are
contacted by a debt collector. You are going to want the time, date and the type of violation
that you suspect occurred. If the debt collector has broken the law or said anything suspicious,
put it in your notes and if the violation
occurred in a voicemail, be sure to save that voicemail. You may be able to sue, counter sue or use this in your
negotiations on these debts if they have violated debt collection law. Of course it’s important to pay the debts that you legitimately owe,
but you should never pay off a debt without having
something in writing. This is especially true if the company has offered you a settlement. You need to have proof
of that offer in case you someday need to defend
it if the debt pops up again. For more information about these and other debt collection
scams, please visit our website at LowIncomeRelief.com. Thank you so much for watching. I hope this video was helpful to you. Be sure to subscribe to
our channel and visit LowIncomeRelief.com to
discover all the ways that we can help you save
money and get free stuff.