Receiving a call from a debt collector can be stressful, especially if the charges they are trying to collect are fraudulent. Unfortunately, scams and identity theft often lead to legitimate companies or fake agencies pursuing debts that do not belong to you. Knowing what to do in this situation can protect your credit and give you peace of mind. Taking the right steps is essential to resolving the issue effectively and safeguarding your rights.
Stay Calm and Gather Information
The first step when a debt collector contacts you about fraudulent charges is to remain calm. While it may be upsetting to hear about a debt you know nothing about, responding emotionally can make it harder to handle the situation. Ask for details about the alleged debt, including:
- The name of the creditor.
- The amount owed.
- The date of the supposed transaction.
- Any other identifying information related to the account.
Make sure to write down this information or request it in writing. Debt collectors are required by law to provide written notice of the debt, often called a validation notice, within five days of initial contact.
Verify the Debt Is Fraudulent
Before taking further action, confirm that the charges are fraudulent. Mistakes can happen, and there’s a chance the debt collector is pursuing the wrong person or has inaccurate records. Check your financial accounts and credit report for any unfamiliar activity.
If you are confident that the debt is not yours, you can begin the process of disputing it. Be careful not to provide personal information to the debt collector until you are certain they are legitimate. Scammers often pose as collectors to extract sensitive data from unsuspecting individuals.
Request Written Verification
Under the Fair Debt Collection Practices Act (FDCPA), you have the right to request written verification of the debt. This document should include details about the original creditor, the amount owed, and evidence supporting the debt’s validity. Sending this request in writing is critical, as it ensures you have a record of your actions.
Debt collectors are legally obligated to stop collection efforts until they provide verification. This gives you time to investigate the claim and confirm whether it is fraudulent.
File a Dispute
If the debt is indeed fraudulent, you should file a dispute with the debt collector and, if applicable, the original creditor. Your dispute should be submitted in writing and include a clear explanation of why the charges are not valid. Attach supporting documentation, such as:
- A copy of your credit report showing no record of the debt.
- Bank statements or other evidence demonstrating the charges are unrelated to your accounts.
- A police report if the debt resulted from identity theft.
Send your dispute via certified mail and request a return receipt. This provides proof that your correspondence was received. Keep a copy of all documents for your records.
Report the Fraud
In cases of identity theft, reporting the fraud to the proper authorities is essential. File a complaint with the Federal Trade Commission (FTC) and obtain an Identity Theft Report. You can do this online at IdentityTheft.gov.
Additionally, file a police report with your local law enforcement agency. While it may not directly resolve the issue, having an official report can support your dispute and demonstrate your proactive efforts.
Place a Fraud Alert on Your Credit
Adding a fraud alert to your credit report notifies potential creditors to take extra steps to verify your identity before approving new accounts. Contact one of the three major credit bureaus—Equifax, Experian, or TransUnion—to place the alert. Once you contact one bureau, they will notify the others on your behalf.
A fraud alert is free and lasts for one year. It can help prevent further harm while you address the fraudulent charges.
Consider a Credit Freeze
If you believe your personal information has been compromised, consider placing a credit freeze on your report. A freeze prevents creditors from accessing your credit file, effectively stopping new accounts from being opened in your name.
You can lift the freeze temporarily or permanently if needed, and there is no cost to implement it. While a credit freeze does not resolve existing fraudulent charges, it adds an extra layer of security.
Be Cautious About Payment
Debt collectors may pressure you to pay the fraudulent charges to “resolve” the issue quickly. Avoid making any payments or agreeing to payment plans until the debt has been thoroughly investigated. Paying a debt you do not owe can complicate matters and may be interpreted as an admission of responsibility.
Instead, focus on disputing the charges and providing evidence that the debt is not legitimate. A credit report repair lawyer can guide you through this process and help protect your rights.
Communicate in Writing
Whenever possible, communicate with the debt collector in writing. Verbal conversations can be misinterpreted or forgotten, whereas written communication creates a clear record of your interactions.
Send all letters via certified mail with a return receipt to ensure your correspondence is received. Keep copies of all documents, including your dispute, verification requests, and any responses from the collector. This documentation is invaluable if the matter escalates or requires legal intervention.
Seek Legal Help
If the debt collector continues to pursue the fraudulent charges despite your efforts, it may be time to consult a credit report repair lawyer. An experienced attorney can help you:
- File lawsuits against collectors who violate the FDCPA.
- Dispute inaccuracies on your credit report.
- Negotiate with creditors to resolve fraudulent charges.
Legal assistance ensures your rights are protected and increases the likelihood of a successful outcome.
Protect Your Credit
Resolving fraudulent charges is only part of the recovery process. To prevent future incidents, take proactive steps to protect your credit and personal information. Monitor your accounts regularly, update passwords, and use credit monitoring services to stay informed about any changes to your credit report.
Recovering from fraud takes time, but vigilance and the right strategies can minimize the impact and help you regain control.
Get in Touch with Cook Law
Facing debt collectors over fraudulent charges can be stressful, but you don’t have to handle it on your own. Taking the right steps and seeking guidance can help you resolve the issue and safeguard your financial well-being.
If you’re dealing with fraudulent charges or need assistance with credit repair, Cook Law is here to help. Our credit report repair lawyers in California have the experience to navigate the challenges of debt collection and fight for your rights. Let us guide you toward a solution and restore your peace of mind—contact Cook Law today to get started.