1

Introduction

Even if you have never taken out a payday loan, simply by providing your personal information in an online application on a payday loan website will subject you to this scam. What happens is that your personal information - ALL OF IT - gets sold to third parties who may or may not have malicious intentions to make use of it. That is why these callers can be very convincing. Often the calls start with the caller asking if this is John Doe, DOB xx/xx/xxx and SS# xxx-xx-xxxx. If they have all this personal information, they must be legitimate, right? WRONG! Many of these third parties are overseas companies from whom you will never recover your money if you pay them. While there are legitimate debt collectors out there attempting to collect legitimate debts stemming from payday loans, I hope this guide can at least help you weed out potential scammers that want to do nothing more than separate you from your money. With that in mind here are the tips to spot a potential scam.

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The caller threatens you with arrest if you don't pay.

One potential victim recounted that the caller told her a sheriff was ready to come to her house that same evening. Of course, that never happened. This may also be a false and/or misleading representation under the FDCPA. Specifically, 1692e(4) states the following to be a false and/or misleading representation: "The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action."

3

The caller fails to identify the name of his collection agency.

There is no legitimate reason for the caller to withhold the name of the collection agency he/she works for. Furthermore, even if he/she does name the collection agency, it may often be a fake name, or nothing more than letters. Ask what the letters in the agency's name stand for. Often you will not get an answer. If the caller does give the name of his collection agency, put the name in google and see what comes up. You will often see reports of others who have been victimized by the same company.

4

Did the caller state he was attempting to collect a debt?

Often these callers will violate so many provisions of the FDCPA that it becomes clear that you are being scammed. Sections 1692e(11) states the following to be a false and/or misleading representation: "The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector."

5

Did you get a validation notice in the mail?

Typically, this collection agency will fail to send a validation letter within 5 days of the initial phone call. The FDCPA requires that, within 5 days of the initial phone call, a debt collector must send a letter to the alleged debtor containing the amount of the debt, the creditor to whom it is owed, that you have a right to dispute the validity of this debt within 30 days of the notice or it will be presumed to be valid by the collector, and that if you do dispute it in writing, the debt collector will obtain verification of the debt. I have yet to see any victim of this scam receive this required letter.

6

Google the phone number

If you have caller ID, enter the phone number of the caller into google and see what comes up. Again, you will often find reports of other people who have received similar phone calls. If you don't find any useful information, don't worry. The other tips in this guide may provide you with enough information to assess whether you are being scammed by the caller. If you still have concerns, consult a local consumer attorney in your area or go to www.naca.net to see a list of attorneys in your area.

7

Caller refuses to provide you an agreement in writing for any payment arrangement, prior to payment.

Do not ever agree to any payment arrangement without getting it in writing. I cannot stress this enough. Payday loan scams involve getting your payment information as fast as possible and putting it to use as fast as possible. NEVER EVER GIVE OUT YOUR CREDIT CARD OR CHECKING ACCOUNT INFORMATION OVER THE PHONE TO THESE CALLERS. If you believe it could be a legitimate attempt to collect money from you, you should still consult with a qualified consumer attorney in your area or go to www.naca.net and search its directory.

8

Caller won't provide address to mail payment. Only accepts payment over the phone.

This is a huge red flag. Don't fall for it. The caller may even offer you a reduced amount if you pay right away over the phone. While many legitimate debt collectors will press you to make payments over the phone, they will also accept payments by mail. Do not trust any caller that tells you that payments can only be made over the phone. I cannot say this enough: NEVER EVER GIVE OUT YOUR CREDIT CARD OR CHECKING ACCOUNT INFORMATION OVER THE PHONE TO THESE CALLERS. You will never see this money again.

9

Is this debt collector registered in your state?

Many states require consumer debt collection agencies to register prior to engaging in debt collection within those states. Check to see if this company is registered in your state. For example, in Florida, consumer collection agencies are required to register with the Florida Office of Financial Regulation. You can search that office's website for information on any specific collection agency that has registered, when it has registered, and whether the registration is still active or has expired.

10

Did you receive what appears to be an official summons and/or complaint?

Some payday loan collectors use fake legal documents to coerce their victims into paying. It might show up as a civil lawsuit or it may be a criminal complaint. But it may be very, very fake. As someone who has represented clients who received such fake legal documents, I can tell you it really does happen. Don't ignore them. Consult with a consumer lawyer in your area to see if the summons and/or complaint are real. If they are fake, you may be entitled to damages under the Fair Debt Collection Practices Act.