Scam Alert: Unethical Debt Collectors Going After Discharged Debts

Our office was recently contacted by the United States Trustee advising that there have been many complaints that debtors are receiving calls from prior creditors demanding payment for bills or services listed in their bankruptcy. Most of the callers are refusing to send a bill or statement, and claim that the debt was either not included in the bankruptcy or not dischargeable in the bankruptcy.

scam imageUnder the Fair Debt Collection Practices Act creditors are required to send you a bill or statement. If they are not able to do so, it is most likely a scam. These scammers are preying on people who filed bankruptcy in particular. They are trying to scare debtors into making a payment over the phone. As a rule, any creditor calling you and demanding payment right then, should not be paid over the phone.

If you are unsure whether a debt was included or discharged in your bankruptcy, contact your attorney’s office and explain the phone call you received. Your attorney’s office should be able to check your case for the correct information.

If the debt was in fact listed and/or discharged in your bankruptcy case and you continue to receive calls, you should tell them to first send you a bill. If the creditor refuses, take down their information and then contact the US Attorney’s Office to file a complaint.

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Abusive Collection Agency Shut Down; Employees Arrested

Federal agents halted operations and arrested the owner and six employees of an abusive collection agency in Georgia on November 18, 2014.  The arrests were the result of a joint investigation by the FBI, Consumer Financial Protection Bureau, and the Federal Trade Commission.  The agency and its employees are accused of using abusive, deceptive tactics and making false threats to consumers to coerce them to pay.

More information about the investigation: CNN Money


Creditors can utilize many legal tactics to collect debts from consumers, but they cannot make threats of arrest or criminal prosecution, or identify themselves as part of a public agency associated with the police or US Government.  If you get a call or contact from a debt collector, make sure you understand what debt they are collecting.  Watch out for anyone who uses “red flag” statements like:

  • “If you don’t pay this debt, we will send the police to your home/office with a warrant for your arrest.”
  • “You are guilty of check fraud/theft by deception/fraud.  If you don’t pay, you’ll go to jail.”
  • “We won’t send you a notice.  You have to pay now by phone or we’ll sue you.”
  • “You’ll be arrested for tax fraud if you don’t pay immediately.”

A reputable agency would never use threats like these to collect a valid debt.  While creditors can file a lawsuit to collect a valid debt from you, that doesn’t turn the debt into a criminal matter.  If you are uncertain about the debt or collection agency, always ask the creditor to provide you with written verification of the debt.

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How To Opt out of Telemarketing Calls

If you haven’t done so already, it’s easy to register your phone number(s) with the Federal Trade Commission’s Do Not Call Registry.  Visit, or call 1-888-382-1222 from the phone number you want to register.  You should start receiving fewer calls within 30 days of registering.  Your number will be listed on the Registry until the number is disconnected, reassigned, or you request removal of your number from the list.  The FTC also provides a complaint process through the website for consumers who have been improperly contacted by telemarketers after they register.

Here’s how the Registry works: telemarketers are required by law to regularly update their records using the Registry information.  If you’ve registered, telemarketers are forbidden from calling your number.  Telemarketers are required to get Registry updates at least every 31 days.

do not call phone

The Do Not Call Registry applies only to telemarketers, and only if you don’t already have a business relationship with them.  That means that if you’ve done business with a company and they continue to place calls to you, they won’t be stopped by your registration.  Charities, political campaigns and survey companies may also continue to call, since they are not governed by the Do Not Call Registry.

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