Debt collection scammers on the rise amid pandemic, stimulus payments

Investigators

RALEIGH, N.C. (WNCN) – Growing numbers of fake debt collection scammers are moving in on North Carolina residents now that stimulus money is available and the state insurance commissioner is warning citizens to be alert.

North Carolina Insurance Commissioner Mike Causey said state residents are receiving letters from around the country and around the world in which companies claim they are attempting to collect debts.

But he said not all are legitimate.

“There’s a tremendous number of scam artists out there making phone calls, sending letters and doing all kinds of things to steal your money,” said Causey.

He advises when you get a phone call from someone claiming to be a debt collector, give them no personal information.

Instead request a letter and when it arrives, examine it carefully.

“If a letter does not have a license authorization number by the North Carikuba Department of Insurance – it’s not a legal letter,” he said. “That’s a required letter they have to send.”

In North Carolina, it’s up to the insurance commissioner to license and oversee debt collectors.

If you’re in a lot of debt, especially with credit cards, you also need to watch out for scammers who are trying to offer debt relief schemes that ask for upfront fees to remove your debt.

“Under North Carolina law, it is illegal to collect any upfront fees for debt settlement services,” said Alyssa Parker of the Better Business Bureau of Eastern NC.

She also said companies asking for money to reduce or remove your debt rarely reach settlements with creditors.

Other red flags that can alert you to a debt elimination scam include:

  • The Company guaranteeing debt elimination in a set period of time
  • The company wanting financial information such as credit card account numbers and balances
  • The company advising you to cut off all communication with creditors

“Oftentimes creditors are the best way of getting out of debt,” said Parker. “Most of the time they’re willing to work with you and set up a payment plan.”

Causey believes the surge in phony debt collection has to do with the pandemic.

“People have been laid off and get behind in their bills,” he said.

If you’re having trouble with your debt, there are lots of free resources out there to help like a debt management tool proved by the BBB.

Experian can also help. It has a credit boosting tool available online.

The National Foundation For Credit Counselling is a nonprofit organization that also offers people help in getting their credit restored.

You can speak with a counselor after filling out an online appointment form.

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