Avoid Debt Collection Fraud

Avoid Debt Collection Fraud

Process servers are an important tool that attorneys use in debt collection cases to help ensure that legal documents are delivered properly and efficiently, and to help locate and enforce against debtors. We have all heard stories of process servers who do less than quality work and make mistakes or even worse, deliberately misrepresent that a document has been delivered. To add to the problem, it has been reported that more and more scammers are impersonating process servers and debt collectors!

Fraudulent Process Servers

Scammers have been cropping up to take advantage of unsuspecting people who may not understand their legal rights when being served legal papers. Any named individual with a lawsuit against them has a constitutional right to be notified of the pending action. These fraudsters will try to contact their victims and set up a time and date to serve the legal papers. They will then tell them to pay money supposedly owed for their debt or to the courts in order not to have the papers served at all. At times they’ll instruct them to wire transfer the money. Another level of the scam is their inquiry into the victim’s social security number which they can sell or use for further crimes.  Many government websites include information for citizens on how not to be scammed by process server impersonators.

Fraudulent Debt Collectors

Legitimate debt collectors can be difficult enough for the public when their tactics get too aggressive but even more challenging is aggressive fake debt collectors. According to the FTC website, in 2021, the FTC received more than 77,000 consumer reports of collectors using abusive or threatening tactics or trying to collect money that wasn’t owed. A 45% increase from the previous year.” The FTC gives the following warning signs of what debt collection scammers do to swindle people:

  • Tell people they owe a debt that they don’t recognize
  • Threaten to have them arrested
  • Demand immediate payment
  • Request payment via gift card, wire transfer or prepaid debit card (favored methods difficult to trace)

Operation Corrupt Collector

In September 2020, the FTC joined state and federal law enforcement in a crackdown on phantom and abusive debt collection. In the following examples from the U.S. District Court for the District of South Carolina, the federal courts granted the FTC’s request to put a temporary halt to the defendant’s actions and freeze their assets.

National Landmark Logistics, LLC – The company and its operators collected more than $12 million from consumers through illegal debt collection practices including claiming to be a mediation or law firm, making robocalls to threaten legal action, and using the consumers’ personal information to convince consumers the threats were real. In many cases, the consumers did not owe the debt being collected or the defendants had no right to collect it. A year later, the FTC announced it reached a settlement that resulted in a ban on the false company’s operations in the debt collection industry.

Absolute Financial Services, LLC – This company used the personal information of consumers provided to them by National Landmark Logistics to collect more than $5.2 million from consumers through illegal debt collection practices. They also used robocalls threatening arrest and legal action if the debts were not paid. This company was also banned from playing any role in debt collection.

When conducting process service and debt collection it is important to follow all legal protocols and consumers must be aware of the pitfalls of falling victim to scams. Alliance Risk Group provides attorneys with legitimate process service and debt collection support services. Our process servers are trained to deliver legal documents in a professional and efficient manner and provide proof of service that can be used in court. Because of our multiple company services, we can provide background investigations on debtors to determine financial history and creditworthiness, investigations to conduct interviews and uncover fraud, skip tracing to locate debtors who have moved or are difficult to find, and asset searches on debtors to determine whether they have any assets that can be seized to satisfy the debt.

For more information, contact Alliance Risk Group: https://allianceriskgroup.com/contact/