According to reports received by BBB offices in several states, the scammers accuse the victim of defaulting on a loan and claim they are about to be sued. In some cases, the con artists claim to be lawyers with the "Financial Accountability Association" or the "Federal Legislation of Unsecured Loans," BBB officials say.The victim is then given the chance to wire money or provide bank account information for the debt collector to nab it electronically before the matter goes to court. In many cases, victims are subject to dozens of nasty, abusive phone calls in a matter of hours.
More disturbing is that the bogus collectors have the victims' Social Security numbers, home addresses, information about employers, some credit references and even old bank account numbers. The victim is asked to "verify" other private information that could make them subject to identity theft.
"Even though they have sensitive information, they are not real debt collectors," said Alison Southwick, spokeswoman for the Council of Better Business Bureaus in Washington, D.C. "We have to imagine that this is the result of some serious data breach. We don't know what it is yet but it was so serious that we wanted to get the information out right away.
"It is extremely frightening how much information these people have about their victims," Southwick added.
The BBB has already reported the scam to the Federal Bureau of Investigation and the Federal Trade Commission. However consumers remain at risk.
If you get one of these phone calls DO NOT provide any verifying information. Either hang up or demand that the debt collector send verification of the debt in writing. Then:
- IMMEDIATELY put a fraud alert on your credit file with all of the major credit bureaus, Experian, Equifax and Transunion. Because the scammers have consumer Social Security numbers, your risk of becoming a victim of identity theft is through the roof.
- You will automatically get a copy of your credit report when you issue the fraud alert. Be sure to read it carefully and identify any item that's not yours.
- If there are numerous new accounts or "hard" inquiries--those are where you have supposedly requested credit--file a police report. (Soft inquiries are when a creditor has requested general information about you to provide a pre-approved offer of credit. They are nothing to worry about.)
Meanwhile, if you have gotten one of these harassing phone calls, please share the details and how you handled it for the benefit of other potential victims.