The Federal Trade Commission recently shut down a network of fake debt collectors. ftc.gov These companies would falsely claim to be collecting on payday loan debts, when in fact they had no authority to collect the debts. they would threaten lawsuits, or criminal prosecution. In many cases, people made payments just to end the harassment.
Other scams have involved persons claiming to be collecting for the IRS, who in fact have no connection with the government.
You should understand your rights. A legitimate debt collector is not allowed to harass you, or to threaten to do things which they have no right to do, such as arrest you.
If you have any question about the legitimacy of the person who is calling you, there are several steps you can take:
1. Hang up the phone.
2. Request a written “validation notice,” which will tell you how much money you owe, and include the name of the creditor.
3. Consult an experienced consumer attorney.