Is This Debt Collector Legitimate?

How can you verify whether or not a debt collector is legitimate?  Below are a few warning signs that signal a debt collection scam:

• The debt collector threatens you. Legitimate debt collectors probably won’t claim that they will have you arrested or claim that they or their employee are law enforcement officers.
• The debt collector refuses to give you information about your debt or trying to collect a debt you do not recognize.
• The debt collector refuses to give a mailing address or phone number.
• The debt collector asks you for sensitive personal financial information.

Tell the caller that you refuse to discuss any debt until you get a written “validation notice.”  This notice must include the amount of the debt, the name of the creditor, and a description of certain rights under the federal Fair Debt Collection Practices Act.

For additional information and to learn more on debt collection practices, click here.

Teaching Suggestions

• Ask students to draft a sample complaint letter explaining that the debt is not legitimate and demanding the debt collector stop contacting you.
• Ask students to compile a list of governmental and nongovernmental agencies where consumers can send debt collection complaints.

Discussion Questions

1. Do all states require debt collectors to be licensed?
2. If the debt collector is licensed in your state and he/she is not acting properly, what are your remedies?
3. Who enforces the Fair Debt Collection Practices Act and how this law protects consumers?