How To Spot A Payday Loan Collection Scam
Posted July 3, 2012 4:44pm by attorney Daniel Tam
Even if you have never taken out a payday loan, simply by providing your personal information in an online application on a payday loan website will subject you to this scam. What happens is that your personal information - ALL OF IT - gets sold to third parties who may or may not have malicious intentions to make use of it. That is why these callers can be very convincing. Often the calls start with the caller asking if this is John Doe, DOB xx/xx/xxx and SS# xxx-xx-xxxx. If they have all this personal information, they must be legitimate, right? WRONG!
Many of these third parties are overseas companies from whom you will never recover your money if you pay them.
While there are legitimate debt collectors out there attempting to collect legitimate debts stemming from payday loans, I hope this guide can at least help you weed out potential scammers that want to do nothing more than separate you from your money.
With that in mind here are the tips to spot a potential scam.
The caller threatens you with arrest if you don't pay.
One potential victim recounted that the caller told her a sheriff was ready to come to her house that same evening. Of course, that never happened. This may also be a false and/or misleading representation under the FDCPA. Specifically, 1692e(4) states the following to be a false and/or misleading representation: "The representation or implication that nonpayment of
any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action."
The caller fails to identify the name of his collection agency.
There is no legitimate reason for the caller to withhold the name of the collection agency he/she works for. Furthermore, even if he/she does name the collection agency, it may often be a fake name, or nothing more than letters. Ask what the letters in the agency's name stand for. Often you will not get an answer. If the caller does give the name of his collection agency, put the name in google and see what comes up. You will often see reports of others who have been victimized by the same company.
Did the caller state he was attempting to collect a debt?
Often these callers will violate so many provisions of the FDCPA that it becomes clear that you are being scammed. Sections 1692e(11) states the following to be a false and/or misleading representation: "The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector."Source: www.avvo.com
Category: Payday loans