How to protect against phoney debt collectors and scams

After the pandemic, the number of scams that siphon money off people have increased significantly in the UK. According to Lloyds Bank, the advanced fee scam has doubled over the year, and victims lost an average of 200 pounds. Debt collection fraud is becoming very common and can happen to anyone. Knowing how to protect yourself against such fraudulent activities is vital.

Here’s how you can protect yourself against phoney Debt Collectors and scams.

Always request a debt validation letter

Whenever you receive a call from a person claiming to be a debt collector, you first need to ask them to provide a debt collection letter. They are legally bound to send a debt validation letter within 3 to 5 days of contact. If they don’t, you don’t have to give any money to them or even be in contact with them. A fraudulent party will not be able to provide such a legally binding document.

Keep a good record of your past debts

You should maintain a good record of your finances. Keep track of not just your active loans but the closed ones too. It will enable you to cross-check whether you owe the exact amount the collector is asking on the phone. This way, you can easily identify a fraudulent call.

Check your credit score

When you check your credit score, you can usually see all your outstanding and closed debts. Doing so once a month makes it easier to recall any debts if you receive such calls. However, ‌your credit score may not show very old debts in your credit history.

Know your rights

The government has enacted various laws to protect the interest of consumers against debt collectors. Knowing your rights helps you take a strong stand against phoney debt collectors. For example, according to the law, debt collectors cannot threaten you with jail time or share information with your family and friends. Neither can they call you at untimely hours of the day. However, if you are not aware of your rights as a customer, you will not be able to see these actions as a red flag and raise the alarm for fraud.

Negotiate the debt

You can negotiate your debt if you are unable to pay it in full. Legitimate debt collection agencies can help you with that. They can provide discounts on the debt or devise payment plans to pay it in instalments. A phoney debt collection agent will not be able to help you in such a situation and would often demand full payment at once.

Never share your confidential financial details

No legitimate debt collection agency will ever ask you to share your bank account or credit card details. They will also not ask you to pay via prepaid card or money transfer. If you come across agents asking for such information, immediately report them as frauds.

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