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How To Spot And Prevent Phantom Debt Scams?

Have you been threatened with a lawsuit if you don’t make a payment right away?

Debt collectors aren’t always honest about the debts they’re collecting. So, it shouldn’t come as a surprise to hear that collectors sometimes make up debts to collect.

What Is A “Phantom Debt”?

Phantom debts are fake notices that criminal insist you need to pay straightaway.

What’s genuinely ghastly are the criminals trying to scare you into thinking you will be sued, arrested or thrown in jail for a bill that was never yours in the first place

Most debt collectors will use a certain amount of pressure to convince you to pay the debt. After all, they often don’t get paid unless you pay.

And if you have been in business for some years, you would have dealt with many different companies during your business life. It’s possible that a collector could contact you about an account that you’ve long forgotten about.

How Do These Attacks Work?

  1. You receive an unexpected phone call from the energy providers, telecommunication providers or even government departments, claiming you owe money for any unpaid service rendered.

  2. The phone numbers they use will appear local, but this doesn’t make the demand legitimate.

  3. These phone calls demand immediate payments for overdue accounts and using the threat of disconnection, infringements, legal consequences, arrest and prison to try to convince you to pay.

  4. The scammer will provide some bank account details that they want you to pay to or ask you to pay by wire transfer.


An Atlanta-based debt collector was shut down after the Federal Trade Commission (FTC) said it had tried to collect debts that consumers did not owe and had threatened people with arrest and imprisonment.

Aggressive And Relentless

They can be aggressive and relentless. They will call you morning, noon and night and often even try to call your family.

Many people are worried that their identities were perhaps stolen, but usually, it’s just aggressive debt collectors trying to collect money whether or not it is owed. And they don’t care who pays.

How To Protect Yourself From Phantom Debt Scams?

If you are contacted about a debt you don’t recognise, here’s what you can do:

  1. Find out who is calling. Get their name and the name of the collection company and its address and phone number. Ask for their license number. If you’re denied such information, that’s a red flag.

  2. Get what’s called “validation” about the debt. Ask them to provide you with proof of the debt. A debt collector must tell you the amount of the debt and the name of the current creditor. If that information isn’t given, it’s a red flag.

  3. Don’t respond to threats. If someone says, they will have you arrested if you don’t pay immediately, hang up and report the collector to authorities. Any such threatening behaviour is most likely a red flag.

  4. Contact the original creditor: Let the original creditor know that a collection agency has been trying to get you to pay a debt and that you have no record of the account. The supposed creditor will tell you if the account is legitimate and if it has been assigned or sold to that collection agency.

  5. You can’t find anything on debt collector online. One way to check whether a debt collector is legitimate is to search on them on the Internet. Often, you’ll find web pages where other consumers have commented on the debt collector and the business they collect for. If, however, you look up a phone number and receive no results, or if you see others commenting that the company is a scam, then you know to avoid sending any payment to that company.

  6. The debt collector is asking for personal information they should have. Not every debt collection scam aims to trick you into sending payment for a debt. Many are seeking personal information they can use to commit fraud or identity theft.

  7. Even if you do recognise the creditor, it doesn’t mean you’re not being scammed. When you request verification for the debt, the debt collector must provide you with proof of the debt and evidence they’re authorised to collect on the debt. Always check that it is authentic and accurate.

  8. Never give your personal, credit card or online account details. Until you can verify that this debt is authentic, certainly do not hand over your personal and financial information over the phone or the Internet. Secondly, do not send money via a wire transfer to pay a bill.

  9. In some countries, you can stop collectors from calling you about phantom debt (or any other debt) by sending a written cease and desist letter requesting them not to contact you.

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