BBB Warns of Kansas Debt Collection Scams

Inside Subprime: March 28, 2019

By Lindsay Frankel

Americans are dealing with debt in increasingly high numbers, mostly from mortgages, auto loans, and credit cards. We closed out 2018 with a collective $13.54 trillion in household debt, according to a report from the Federal Reserve Bank of New York. That’s $869 billion higher than in 2008, the last time household debt peaked in the U.S.

And as household debt increases, so does the prevalence of debt collection scams. Debt collection scams were one of the top 10 reported scams by Kansas residents in 2018, ranking at number 4, just behind tax collection scams. The Better Business Bureau has issued a warning for Kansas consumers to be on the lookout for debt collection scams, since the situation shows no signs of improvement. Scammers will use harassing phone calls for weeks or months until their victims break down and pay the fake debt, and some even use personal information about the victim to make the scam appear legitimate.

Identifying a scam

Debt collection scammers call consumers, claiming to work for a law firm, government agency, or loan company that is attempting to collect a debt from the victim. They sometimes use personal information to create confusion; consumers may believe they’ve forgotten about an old debt. In reality, the debt they are looking to collect doesn’t exist. But if you let the scammer know that you don’t owe money, they may resort to fear tactics, threatening consumers with lawsuits, wage garnishment, or even an arrest or court appearance.

Responding to a scam

If you have any doubts about whether you owe money, or whether the call is a scam, do your research to verify that the debt collector is legitimate. Ask for the name, address, and phone number of the company and cross check the information with an independent source, such as the Better Business Bureau.

You also have the right to ask for a validation notice, which debt collectors are required by law to provide in writing. The validation notice should include a statement of your rights along with the name of the creditor and the amount being collected. If the caller refuses to supply the notice, hang up immediately – it’s a sign they’re not following the law. If the scammer provided you with personal information to try to persuade you, you should also set up a fraud alert for your credit report.

If you’re certain you don’t have any outstanding loans, your best defense is to simply hang up. You should also check your credit report to make sure there hasn’t been any suspicious activity.

Reporting a scam

Even if you escaped the scam attempt without incurring any financial harm, you should always report the scam. If nothing else, it may prevent fellow Kansas residents from becoming duped by the scammer. Use word of mouth to warn your friends and family, and report the scam to both the Better Business Bureau.

For more information on subprime loans, see our city and state financial guides including Kansas, Kansas CityLawrenceOlathe, Topeka and Wichita