The phantom debt collection scam comes in a number of variations, but the common element in almost all of them is a claim that a consumer owes money on a debt and needs to pay or else face serious consequences. Regardless of whether the consumer actually takes out a loan, he or she may receive a call later demanding money be paid.

Stay safe. Be Informed.

Often, the scam begins when a consumer inquires about a payday loan or other short-term credit online or over the phone. The Web site or phone number that the consumer contacts may or may not be associated with a legitimate lender.  Since consumers interested in payday loans are often financially strapped, they may be susceptible to such demands whether or not they actually took out a loan.

Even for consumers who do not have outstanding debts, the con artists are threatening and convincing and have led some consumers to wonder whether someone has taken out loans in their name. In cases where a consumer actually does have outstanding loans, the scam artist may claim that the victim owes far more in fees and interest than he or she actually does. In other cases, the victim of the scam may be behind on a loan, but the caller has no authority to actually collect on the debt. No matter the consumer's actual situation, skilled con artists are convincing them to hand over precious cash to settle the "debt." Scammers often demand payment on these phantom debts via wire transfer, credit or debit card.

Consumers who have been approached or have had co-workers or family members approached by debt collection scammers should keep the following tips in mind:

  • If a caller asks you to wire money or provide personal financial information such as a bank routing number, credit or debit card number over the phone, hang up. It’s probably a scam.

  • Be wary when applying for payday loans via the Internet. Not only do you risk exposing your personal information to criminals, online loans typically have higher fees and interest rates than loans applied for offline.

  • If you are unsure of whether or not you owe a debt, ask the caller to only contact you by mail and to provide written proof of the debt. The Fair Debt Collection Practices Act requires debt collectors to stop calling their targets if they are asked to do so.

  • If you receive a call from someone claiming to be from a government agency or official-sounding institution who says you owe money on a debt, hang up and call the organization in question directly.

  • If you are unsure whether you are delinquent on a payday loan, contact the lender directly to inquire about the status of your account.

  • Look up numbers or email addresses for lenders on your own or rely on your loan paperwork to find a legitimate contact number.

  • Consumers who receive calls from phantom debt collection scammers may have had their personal information exposed, raising the risk of identity theft.The Federal Trade Commission offers a step-by-step process for recovering from identity theft here.

  • If a scammer using this scam approaches you, or if you’ve already fallen victim, contact local law enforcement and file a complaint with