How to Avoid UK Debt Collection Agency Scams

We all acquire debt at some point in our lives. And, whether it’s in a business capacity or as an individual, many of us will face action from a debt collector.

While this can understandably be stressful, many debt collection agencies are actually fairly reasonable. They’re not allowed to phone you repeatedly, hassle you in public, or visit you at home… if they’re legitimate, that is. But what happens when they’re not legitimate?

Businesses and individuals in the UK lose hundreds of millions of pounds a year to fraud, much of this orchestrated by scammers posing as debt collectors. Don’t fall into the trap. Read on for our top six tips on how to avoid debt collection scams.

Find out how to spot the red flags, and outsmart the scammers

What is a debt collection scam?

A debt collection scam involves a criminal trying to steal money from a business or individual, by posing as a debt collection agency. The scammers call you up, referring to a non-existent debt and demanding quick payment.

What makes these scammers particularly convincing is that, often, they’ve done their homework. They may have already obtained your credit report and gleaned some of your personal details by committing identity fraud through the internet.

This makes the scammers not only more convincing, but infinitely more dangerous. But to stop them, you first need to spot them.

How to recognise a debt collection scam

There are strict rules and codes of conduct that govern what debt collectors are and aren’t allowed to do. Debt collection agencies have to stay within these lines to maintain professional credibility and operate legally.

Scammers, however, don’t need to play by the rules – and they’ll try everything they can to separate you from your hard-earned money. But it’s precisely because they don’t play by the book that you can spot them – if you’re vigilant enough.

Here are a few surefire ways you can separate a legitimate debt collection agency from a fraudulent one. Be suspicious if:

X The debt collector asks you for information they should have

If a debt collection agency is legitimate and has been hired to recover an actual debt you owe, it should already have some key details about you. This generally includes personal details (your name, address, and date of birth), as well as some financial information, like your account number.

If a collection agency is asking for any of this information, be skeptical – they’re probably scammers. And it’s not always money they’re after, either – identity theft is common in the UK, and fraudsters with your personal information can do a lot of damage.

X The debt collector threatens you with prison time

It’s illegal for a debt collector to threaten you with criminal sanctions, such as arrest or jail time. Debt collectors are also forbidden to pose as government officials or any other kind of public servant.

X The debt collector asks you to pay straight away

Any debt collection agency that puts an unusual amount of pressure on you to pay instantly should be treated with the utmost caution. While most debt collection agencies (by their very nature) can be fairly pushy, any forceful attempts to get you to pay on the spot or over the phone are suspicious.

Such attempts often come with threats and scare tactics, or reference to legal action if you don’t pay up instantly. Don’t give in – take your time, jot the agency’s phone number down, and investigate the debt further before taking any action.

X The debt collector asks for payment via wire transfer

If they’re real, debt collection agencies will accept payment with debit or credit cards, as well as via cheque – never wire transfer. This method of payment, which includes popular brands like TransferWise and Western Union, is a favourite of scammers around the world.

Why? Because it’s quick, straightforward, and – most importantly – untraceable. Be cautious of any debt collector asking for a wire transfer, and remember that any money you send this way will be very, very difficult to get back.

X The debt collector’s phone number can’t be found online

When a debt collection agency contacts you, doing even the most basic level of research can make all the difference. Try typing the number they called you from into Google. If there are zero search results, then the company that just called you probably doesn’t exist. You may also find consumer watchdog sites that list that phone number as a verified scammer.

Searching the internet for what you know about the ‘debt collector’ takes just a few minutes of time – but it could end up saving you thousands of pounds.

X The debt collector won’t provide company contact info

If you’re on the phone to a debt collector and have doubts about their authenticity, ask them these three questions:

• What’s the name of your company?
• What’s your agency’s business address?
• What’s your phone number?

Debt collectors are required by law to provide you with this information. If they are unable – or unwilling – to furnish you with these details over the phone, then be suspicious.

When you do get the details above, you can research the company online, read independent reviews, and explore its website. You can also send a letter to the address, asking for proof of the debt that’s owed.

Proper debt collection agencies in the UK

Whether you’re dealing with a collector over money you owe, or a debt you’re trying to recover, either way it’s important to have a good knowledge of the best debt collection services in the UK. Here are some of the highest-rated ones we analysed in our market research:

Next steps

When it comes to avoiding falling prey to a debt collection scam, the best advice is always to be vigilant. Ask questions about the company and the debt in question, and check these against your own records. Most importantly, trust your instincts – if it feels even a little bit wrong, the chances are that it probably is.

And, if you’re thinking about hiring a debt collection agency to tidy up some of those old debts you’re owed, remember to choose a reputable company. Don’t be suckered in by absurdly low rates and pie in the sky promises. If it’s too good to be true, it probably is.

To receive quotes from leading debt collection agencies, take a minute to fill out our free quote-finding form. We’ll ask for some brief details about your business, and match you with the suppliers that are best suited to your needs, who’ll be able to provide you with tailored quotes.