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Better Business Bureau warns of phony debt collectors
Phony debt collectors are using massive amounts of personal data to convince individuals they owe large sums of money on defaulted payday loans.
On Monday, the Better Business Bureau (BBB) put out a national alert regarding the scheme. The organization warns the scammers often have access to consumer and personal data that they use to convince citizens to pay up. The breadth of information the scammers use in their attempts to make fast money may indicate a data breach, according to the BBB.
"Thousands of people may have had their personal information compromised, and given the scammers’ tactics, it appears that those who have previously used payday loan services could be particularly at risk," said Robert W.G. Andrew, CEO of Better Business Bureau serving Alaska, Oregon and Western Washington.
How it works
Here's how the scheme works. The victim receives a phone call from a person claiming to be a lawyer representing the Financial Accountability Association or Federal Legislation of Unsecured Loans, according to the BBB. The victim is told he or she owes money on a defaulted payday loan, and that he or she will be arrested and taken to California for trial unless funds — as much as $1,000 — are provided to the caller. Wire transfer, bank account or credit card information is solicited.
The victim's personal data is used in an attempt to collect the money. Social Security and driver's license numbers, old bank account information, home addresses, employer information or names of friends and professional references are mentioned, according to the BBB.
The scheme is alarming, but there are measures that can decrease the chances of becoming a victim in this and other shams.
Mail theft, bank and credit card fraud are crimes frequently reported to Federal Way police. On July 29, in the 30200 block of 25th Place South, a victim reported he saw an unknown suspect take an outgoing bill from his mailbox, according to the police log. Federal Way police crime analyst Lindsey Tiroux suggests using a secured or post office box to receive mail.
On July 28 in the 30800 block of 11th Avenue Southwest, a victim reported receiving a call from Discover. The agency alerted the victim that someone attempted to establish a credit card using the victim's personal information, according to the log.
Tiroux suggests requesting a credit report three to four times per year. It's the only way to know what accounts have been opened in your name, she said. A victim may never know an account exists if not for a credit report, Tiroux said. She also urges residents to carry only the most necessary personal documents when out and about. Stolen checks can be used to obtain a payday loan, she said. Identification such as a Social Security card gives criminals easy access to other personal information.
"Social Security numbers are kind of the key to your entire life," Tiroux said.
She added many organizations, such as movie rental businesses, that request a Social Security number do not actually require the number to open an account. Be vigilant. Pay attention to bank statements and do not leave personal information unattended in public, Tiroux said.
"Time and time again, I tell people, do not leave your purse in the car," she said.
Lastly, even if nothing appears to have been stolen in a break-in or burglary, report the crime. Police work closely with banks and cash advance offering agencies, she said.
The BBB urges consumers that receive suspicious telephone calls about outstanding debt to ask the collector to provide official documentation of the debt. The BBB asks consumers not to confirm financial information with a caller, and to file a complaint with the Federal Trade Commission if a caller violates telemarketing laws.
Check it out
• To learn more about identity theft, visit the Washington State Office of the Attorney General Web page titled "Identity Theft and Privacy" at www.atg.wa.gov/ConsumerIssues/ID-Privacy.aspx.
• According to Washington State Office of the Attorney General, the Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies to provide consumers with a free copy of his or her credit report once every 12 months. Request a report from www.annualcreditreport.com, by calling (877) 322-8228 or by completing the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.