In the latest spin on debt collection deception, scammers pretending to be lawyers are calling consumers across the country, threatening imminent arrest unless their victims immediately pay up to $1,000 to settle a payday loan—a short-term loan based on the value of an upcoming paycheck or other expected income.
Although that threat is certainly frightening—and illegal—what’s even more worrisome is how the phone-dialing phonies make their bogus claims look legitimate.
“These scammers have an incredible amount of personal information about the people they are calling. They have Social Security numbers; cell, work and home numbers; personal references, and even contact information of family members of the intended victims,” notes Alison Southwick of the national Council of Better Business Bureaus, which issued a warning about this ruse.
“We don’t know how they could have gotten that level of personal information unless it was obtained illegally, so we think these scammers may be behind some sort of security breach—possibly having stolen records from a payday lender or another company,” Southwick says. In some cases, the BBB reports, the scammers even have their intended victims’ bank account and driver’s license numbers, as well as their employers’ names.
Southwick tells Scam Alert that she personally has been receiving several inquiries a day from consumers who received these threatening phone calls. “Many say they have had payday loans in the past, but most tell me that they either repaid them in full or are in the process of doing so,” she says. However, others tell BBB offices across the country that they have never taken out a payday loan.
In their phone calls, the scammers say they’re calling on behalf of the “Financial Accountability Association” or the “Federal Legislation of Unsecured Loans Association”—two phony companies whose names suggest a government connection. They instruct consumers to either wire money or provide their bank account or credit card numbers to pay off the supposed loan or they will be “arrested and extradited to California within the hour to stand trial.”
Last summer, a similar scam preyed on West Virginians. The scammers pretended to be lawyers, police officers or bankers, and said they were calling from “U.S. National Bank,” “Federal Investigation Bureau,” “United Legal Processing” and other official-sounding (but fake) organizations. But those callers, unlike the current ones, did not have a deep knowledge of their victims’ personal data.
What to do if you’re called
If you receive calls about an outstanding debt of any kind:
• Do not provide or confirm any personal information over the phone, especially bank and credit card accounts or Social Security numbers.
• Without giving your address, ask any person claiming to be a debt collector to mail you official documentation of the debt. Although scammers may have your address and might send you phony paperwork, authentic paperwork will list the original debtor and amount.
• If you have caller ID, note the telephone number of the incoming call. Recent scammers have used the following numbers, but may now employ others: 949-468-5107, 415-200-0274, 213-784-5745 and 408-715-1614. Each has generated numerous mentions on telephone complaint websites. Some people report international phone numbers (starting with “0”) appearing on their caller ID, suggesting the scammers may be working from overseas.
• Pay especially close attention to your credit report for several months after receiving a debt collection phone call to ensure that no fraudulent charges have been made in your name. You can obtain a free credit report.