A Dead Debt?

The phone calls come when people are most vulnerable, just days after a spouse or other family member has died. But the callers are neither friends expressing their condolences nor funeral home staffers; they’re bogus bill collectors.

They struck recently in Mississippi, where at least half a dozen grieving families were telephoned with startling news: Their dearly departed had owed a large debt, and if it wasn’t paid immediately, collection efforts would begin.

“We don’t have a lot of good information, but we do know enough to believe that these calls are not legitimate,” says Bill Moak, president of the Better Business Bureau of Mississippi in Ridgeland, whose agency was quickly notified. The phone calls, he says, “seem to be specifically targeting elderly folks when they’re not in their best decision-making capacity.”

This con is similar to one that prompted nationwide warnings from state officials in 2002. In those cases, families in at least 14 states received payment demands, within days of the death of a loved one, from a bogus outfit called Exodus Collection Services. The demands came in phone calls and invoices asking for up to $700 to settle an alleged unpaid debt of the deceased. Exodus proved to be a nonexistent company that rented a mail drop in Delaware to collect “debt” money. In the newer Mississippi calls, the callers named no specific collection agency. Besides trying to collect nonexistent debts, scammers looked for other ways to trick the grieving.

“There’s often heavy pressure to have personal information divulged over the phone,” says Moak, who thinks the scammers chose their marks from newspaper obituaries. “Bereaved families may be in a rush to settle the matter, and be more likely to let their guard down.”

To protect yourself against this scam:

• Know your obligation.“Unless a family member is a cosigner, they’re not responsible for the deceased’s debt and under no obligation to repay it,” says David DuMond, an Indiana lawyer specializing in collection law.

• Know the procedure. If you cosigned for a loan or a credit card with a balance, it is legal—if unethical—for legitimate collection agencies to contact you after the borrower’s death. “Bill collectors should go through the executor or probate court to attempt to collect a debt owed by the deceased,” DuMond says. So provide that contact information and nothing else—especially not your Social Security or bank account numbers.

• Get the facts. If curiosity gets the best of you, require the collection agency to furnish proof of the debt. Have the agency put in writing who is owed, how much, for what reason, when the debt was acquired and why you are being contacted.

• Do an identity check. When contacted by a bill collector—for your debts or those of a deceased loved one—check the company’s authenticity by contacting the Better Business Bureau. If things don’t add up, notify your state attorney general’s office.

Sid Kirchheimer is the author of “Scam-Proof Your Life”(AARP Books/Sterling).