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Crooked debt collectors trick consumers

The Federal Trade Commission recently issued a warning to consumers: Refrain from paying debts you do not owe. While this cautionary advice may seem like a tutorial in common sense, individuals in Michigan and across the nation have been targeted by a debt collection scam that intimidates its victims into shelling out cash.

It is estimated that around eight million phone calls have been made to consumers by phony debt collection agencies. The scammers use call centers in India to harass persons into handing over money, sometimes more than once. Common tactics include threatening to garnish wages or arrest individuals at their place of work.

And the fraud isn't always easy to recognize. Aggressive callers may claim to be from legitimate sounding government agencies, such as the Bureau of Crime Identification. They can also manipulate caller IDs to make it appear as though they are based with a real organization in the United States.

The debt scam has been reported to involve the mention of overdue, high-interest payday loans. This can be confusing to those who have taken out such loans, or who are led to believe relatives have done so under their name. Some victims simply cave under pressure, or make payments out of embarrassment or fear.

According the Federal Trade Commission, the scammers have demanded payments up to $2,000. If you receive a harassing phone call, it is important to verify the callers identity. Request that they disclose their name, company, street address and telephone number. Ask them to mail you a written statement - a right provided under the Fair Debt Collection Practices Act.

Source: Detroit Free Press, "Susan Tompor: Debt isn't real but harassing phone calls are," Susan Tompor, March 1, 2012

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