Phony debt collectors seem sincere, but they're out to get your money

If you get a call that threatens you must pay up when it comes to a bad debt, don't take action right away as it could be a scam.

Debt collection scams are one of the most frightening and persistent scam types. Victims often report to the Better Business Bureau serving Eastern North Carolina (BBB) that scammers harass them for weeks or even months, both at home and at work, trying to get them to pay a debt they don't even owe.

Alyssa Parker with the BBB says, "If you don't have any debt then it's nothing that you should be worried about and just go ahead and hang up the phone. But if you do have debt, and you're not really sure if this is a legitimate scam or not, there is some information that by law debt collectors are actually supposed to provide to you."

Here is how the scam works according to the BBB:

The scammer calls and tells you that they work for a loan company, law firm or government agency, and claims to be collecting an overdue payment. When you reply that you don't owe money, the "debt collector" starts to make threats of suing you, having your wages garnished, arresting you, or forcing you to appear in court thousands of miles from home.

Despite the threats, these "debt collectors" don't have any legal power. In most cases, the alleged overdue loan doesn't even exist. Don't give in and pay the money you don't owe. If you do, the scammer will likely be back for more.

The "Good Cop" Version:

You receive an unsolicited call from a debt collection agency. The caller claims you have an old unpaid debt that is about to go to court. The person who speaks with you is polite and appears to have your best interests at heart. They seem like they sincerely want to help you avoid going to court. To fix the situation, all you need to do is make a reasonable payment, perhaps even divided up into several installments.

No matter how kind the caller seems, don't fall for it. If you make the payment, the person you spoke to on the phone will take the money and disappear. Any future efforts to contact them will be in vain.

Here are the Troubleshooter Takeaways:

• Always ask the debt collector to provide an official "validation notice" of the debt. This is a requirement under US law. If they don't provide it, hang up.
• Also ask the caller for their name, company, street address and telephone number. If the collector is legitimate, they should have details on the accounts in question.
• Finally, don't provide any bank account, credit card, or other personally identifiable information over the phone, instead, ask for them to send you the proof of debt in writing.