False Debt Scams

Scam Alert

False debt scamming is on the rise, we are told.  Drawing on the plethora of information which is available on-line, false debts are created, which are then often sold to criminal gangs at a fraction of the alleged outstanding debt, and the gangs then go to work.  Often the "tools" used to get people to pay up on the bogus demand include intimidation and threats.  

Here is an article/case-study of one "target" in the United States who fought back. 

On the morning a debt collector threatened to rape his wife, Andrew Therrien was working from home, in a house with green shutters on a cul-de-sac in a small Rhode Island town. Tall and stocky, with a buzz cut and a square, friendly face, Therrien was a salesman for a promotions company. He'd always had an easy rapport with people over the phone, and on that day, in February 2015, he was calling food vendors to talk about grocery store giveaways.

Therrien was interrupted mid-pitch by a call from his wife. She'd gotten a voicemail from an authoritative-sounding man saying Therrien was in some kind of trouble. "I need to verify an address to present you with your formal claim," the man had said. "Andrew Therrien, you are officially notified."

A few minutes later, Therrien's phone buzzed. It was the same guy. He gave his name as Charles Cartwright and said Therrien owed $700 on a payday loan. But Therrien knew he didn't owe anyone anything. Suspecting a scam, he told Cartwright just what he thought of his scare tactics.  Cartwright hung up, then called back, mad. He said he wanted to meet face-to-face to teach Therrien a lesson.

"Come on by, asshole," Therrien says he replied.  "I will," Cartwright said, "and I hope your wife is at home."  That's when he made the rape threat.  Therrien got so angry he couldn't think clearly. He wasn't going to just let someone menace and disrespect his wife like that. He had to know who this Cartwright guy was, and his employer, too. Therrien wanted to make them pay.  At the same time, he worried that the call might not be a swindle. What if some misinformed loan shark really was coming for them? But Therrien didn't have any real information he could take to the police.

Then he remembered Cartwright had left a number with his wife.  He dialled.  Somewhere—at the top of a ladder of dirty debt collectors that Therrien would spend the next two years relentlessly climbing—a man named Joel Tucker had no idea what was coming.

Earlier this year, I met Therrien, 33, at a Panera Bread restaurant in central Providence. He had reluctantly agreed to be interviewed, on the condition that we not reveal his hometown or his wife's name.  Therrien had been caught up in a fraud known as phantom debt, where millions of Americans are hassled to pay back money they don't owe. The concept is centuries old: Inmates of a New York debtors' prison joked about it as early as 1800, in a newspaper they published called Forlorn Hope.

But systematic schemes to collect on fake debts started only about five years ago. It begins when someone scoops up troves of personal information that are available cheaply online—old loan applications, long-expired obligations, data from hacked accounts—and reformats it to look like a list of debts. Then they make deals with unscrupulous collectors who will demand repayment of the fictitious bills. Their targets are often poor and likely to already be getting confusing calls about other loans. The harassment usually doesn't work, but some marks are convinced that because the collectors know so much, the debt must be real.

The problem is as simple as it is intractable. In 2012, a call centre in India was busted for making 8 million calls in eight months to collect made-up bills. The Federal Trade Commission has since broken up at least 13 similar scams. In most cases, regulators weren't able to identify the original perpetrators because the data files had been sold and repackaged so many times. Victims have essentially no recourse to do anything but take the abuse.  [NZ Herald]

The story goes on to describe the lengths this particular victim went to in order to extract utu.

In New Zealand, if you get that "out-of-the-blue" call or approach alleging that you owe money and demanding that you pay up, here is some advice from a legit debt collection business.

HOW TO DEAL WITH FAKE DEBT COLLECTORS

Warnings are being issued to consumers to watch for persistent scammers who attempt to collect debts that don’t even exist.  When an unfamiliar voice on the phone informs you that you owe hundreds of dollars on an unpaid debt, a debt you don’t even recall having, what do you do? How do you know if the call is legitimate?

Anyone can fall victim to calls from fake debt collectors because the scammers are often very convincing. If you haven’t been doing a good job of keeping track of your debts, you could become easy prey.  Here are some tips on how you can protect yourself.

Know Your Rights

Whatever they tell you, tell them you’ll wait for the letter – but don’t give them your address. Debt collection agencies must send a written letter outlining the details of the debt and if they’re legitimate they’ll have your address on file.  You should also know that debt collectors are not permitted to use abusive, unfair, or deceptive practices when attempting to collect your debt.

Ask Questions

If someone calls you claiming to be from a debt collection agency, ask them for the name, address, and phone number of the company they’re calling from, or the contact details of the debtor they’re trying to reach.  A legitimate debt collector will be happy to provide you with this information whereas phony collectors may avoid giving an answer.

Keep Track of Your Debts

If you receive written notice of a debt, order your own credit report so that you can see whether the debt appears on your file. If you don’t recognise the debt, you must respond in a letter stating that you are not the owner of the debt. [iCollect]