Phantom Debt Collectors

Phantom Debt Collectors

We recently came across this really great article — “PhantoM Debt ColleCtor” by Michelle Black of What she writes about is so impactful that we are sharing it here as well. By now you should know that credit education is a big deal to us. Taking the first step and coming to us to help you with credit repair is a big one… but in order to help you stay on the path of good credit – the education part is key. Receiving calls from debt collectors is STRESSFUL, you are most likely short on cash as it is which gives you enough stress, but then add the constant phone calls and sometimes harassment- that’s not helping a bad situation get any better – just worse. Thankfully there are laws out there in place like the FCRA, and CROA that outline what’s right and what’s wrong. What do you do though when someone isn’t following the rules? You can report them to the federal government, you can file a complaint with the CFPB, you can send them a letter outlining your rights based on the FDCPA. All of these things you can do on your own, or you can talk to us and we can help.

Please read below the full article…

Phantom Debt Collectors

By Michelle Black,

If you have ever been in the unfortunate situation of receiving a call from a debt collector, especially a third-party collection agency, then you are likely all too familiar with the stress and fear that such calls can introduce into your life. Obviously you will never find a consumer who enjoys receiving collection calls and many collection agencies are known for their unsavory collection tactics. However, in the spirit of fairness it is worth pointing out that sometimes legitimate collection agencies are vilified due to the actions of illegal or phantom debt collectors.

While not all collection agencies behave badly, there are many bad apples in the industry who do routinely use scare tactics and even illegal methods in an effort to collect outstanding debts. However, there exists a brand of criminal “debt collectors” who are infinitely worse – phantom debt collectors.

How Phantom Debt Collectors Operate

Phantom debt collectors, as these criminals are commonly called, are illegitimate “companies” who make up debts which were never really owed in the first place and try to frighten people into paying these phony accounts. They are scam artist, often very skilled at conning the unsuspecting public out of their hard earned money.

Phantom collectors are often armed with information acquired through identity theft. As a result if you ever receive a call from one of these con artists the caller may reference an account with a creditor whom you actually recognize. Next the caller will try to convince you that a payment is due or that you owe more than your legitimate balance. For example: “Remember that ABC Bank account you thought you paid off? No sir, you actually still owe a balance of $500.”

Additionally, while all phantom debt collection scams are a little different, these scam artists will always try to convey a sense of urgency and will generally threaten serious consequences if you do not pay immediately via a credit card, debit card, or wire transfer. Obviously these practices are 100% illegal.

Recognizing the Difference

Unfortunately the phantom debt collection scam is probably not going away any time soon. Due to the fact that this scam has become so common it is important to understand how to protect yourself from these would-be-predators. Here are 3 expert tips.

  • Identify the Caller When a collection agent calls you on the phone ask them to identify themselves, the company they work for, where the company is located, and their phone number. A legitimate collector will properly identify themselves. 
  1. Debt Verification When a third party collection agent calls you regarding a debt that you are not sure whether or not you owe, remember that you have the right under the Fair Debt Collection Practices Act (FDCPA) to request a verification of the debt. If the person on the phone refuses your request then the call is likely a scam.
  2. Call Your Creditor Back Directly Received a call from someone claiming to represent a creditor with whom you do have an existing or former relationship? Remember you can always hang up and call the creditor back directly at the number on your statement to ensure that the caller with whom you were speaking is a legitimate employee.
  3. Check Your Credit Reports If someone calls you attempting to collect a debt that you do not recognize then pulling a copy of your 3 credit reports is a wise idea. You can pull your three reports for free each year at When you pull your reports you should verify whether or not the account which was mentioned to you over the phone actually appears on your credit. If the account does not appear on any of your credit reports then the call could possibly be a scam.

Matt Listro of National Credit Fixers, a 21 year credit repair industry veteran, recounts this story of his experience with a phantom debt collector:

“Our client contacted us because of a ‘fishy’ sounding collection call. When I called the collector, he identified his company as ‘Lincoln National Collection.’ All words in the company name are very common place and generic, making it hard to identify if the company actually existed.  I pressed further and asked for their office location. After much stalling, I was told their offices were in downtown Los Angeles on the 22nd floor of a particular office building. A quick Google search yielded the name of a law firm located on the 22nd floor and a phone call to them documented that the law firm occupied the entire 22nd floor of the building. The law firm never heard of the ‘phantom collector.’ We turned the phantom collector in to our local state attorney general, but these phantom collectors often operate overseas and routinely change phone numbers frequently, making it difficult to catch them.”