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Jim Winsett of the BBB.

Q. I read that there is current national legislature being created to change and monitor debt collectors and how they operate. However, debt collection scams persist; what may a consumer do to avoid these scams?

A. Debt collection scams are one of the most frightening and persistent scam types. Victims often report that scammers harass them for weeks or even months, both at home and at work, trying to get them to pay a debt they don't even owe. However, BBB is receiving increasing reports that con artists have recently changed their tactics. Many scammers have switched from "bad cop" to "good cop."

How the Scam Works:

The scammer calls and tells you that they work for a loan company, law firm or government agency, and claims to be collecting an overdue payment. When you reply that you don't owe money, the "debt collector" starts to make threats of suing you, having your wages garnished, arresting you, or forcing you to appear in court thousands of miles from home.

Despite the threats, these "debt collectors" don't have any legal power. In most cases, the alleged overdue loan doesn't even exist. Don't give in and pay money you don't owe. If you do, the scammer will likely be back for more.

The "Good Cop" Version:

You receive an unsolicited call from a debt collection agency. The caller claims you have an old unpaid debt that is about to go to court. The person who speaks with you is polite and appears to have your best interests at heart. They seem like they sincerely want to help you avoid going to court. To fix the situation, all you need to do is make a reasonable payment, perhaps even divided up into several installments.

No matter how kind the caller seems, don't fall for it. If you make the payment, the person you spoke to on the phone will take the money and disappear. Any future efforts to contact them will be in vain.

Tips to Spot This Scam:

Ask the debt collector to provide official "validation notice" of the debt. In the U.S. and most of Canada, debt collectors are required by law to provide this information in writing. The notice must include the amount of the debt, the name of the creditor, and a statement of your rights. If the self-proclaimed collector won't provide the information, hang up.

Ask for more information. If you do owe money and aren't sure if the caller is real, asking for their name, company, street addresses, and telephone number. Do not provide any bank account, credit card, or other personally identifiable information over the phone. If the collector is legitimate, they should have details on the accounts in question.

Protect Yourself:

Just hang up. If you don't have any outstanding loans, hang up. Don't press any numbers or speak to an "agent."

Check your credit report. In the US, check with one of the three national credit reporting companies (Equifax, TransUnion, and Experian). This will help you determine if you have outstanding debts or if there has been suspicious activity. All consumers receive one free credit report each year at or by calling 1-877-322-8228.

Place a fraud alert on your credit report. If the scammer has personal information, place a fraud alert with the three national credit reporting companies.

To report a scam, go to BBB Scam Tracker.

Jim Winsett is president of the Better Business Bureau in Chattanooga.