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Debt Collection Scams And Identity Theft: How To Avoid Both

Last week a friend, Mary Grace, sent an e-mail message asking if I had:

"... heard of NCO Financial Debt Collectors? I got an automated call and when I called the number back it was busy. I called their main 800 number off of their website and they asked me for my social and name - they would not give me any information on the reference number that was left on the automated message. I did not give them my name or my social and ended up hanging up on the rep because he could not identify why they called me stating there were many names associated with the reference number and he needed my information to understand why they called."

I hadn't heard of NCO Financial Debt Collectors. There is a valid collections company with a similar name: NCO Group (a/k/a NCO Financial Systems. The call sounded sketchy since the reference number didn't identify Mary Grace specifically. I told her to contact the Better Business Bureau (BBB), and contact the U.S. Federal Trade Commission (FTC). I assured her that she was correct to not disclose her Social Security Number and other sensitive personal information without first getting written proof of the debt.

In her e-mail message, Mary Grace also wrote that she had:

"... called AT&T to check on the 888 number the automated message left and [the AT&T customer service representative] said it was probably an outbound number only and that he hears these kinds of calls all the time but can not give any advice because of legal reasons."

Yes, this debt collection call was definitely sounding like a scam.

Mary Grace couldn't think of any company she owed money to, as she is very good with her credit. Perhaps she had a debt at Cedars-Sinai Medical Center due to a recent surgery, but theyhadn't contact her.

Since Mary Grace lives in California, I suggested that she check the State of California attorney general's web site for advice about her rights and how to deal with debt collection phone calls and collection agencies. Every state has an attorney general (AG), and the AG's web site usually describes the rights consumers have and what constitutes harassment by a debt collector.

While California state law allows debt collectors to supply information about bills they are collecting to credit reporting agencies, the collection agency cannot threaten a consumer with this unless it is already a customer of the reporting agency. The collection agency must tell the reporting agency whether any dispute has been filed, and it must update the consumer's record to show when the debt is paid.

I did some light research and found that there tend to be two types of debt collection scams:

  • Fake debt collection agencies
  • Valid debt collection agencies with fake debts

The first type usually includes a scam artist calling with fake debts. The scammer is trying to trick consumers into revealing over the phone their sensitive personal data: Social Security number, bank account information, and so forth. Disclosing any of this could lead to identity fraud.

How do the collections scammers get consumers' name and address information? Any number of ways: from combing through online white pages web sites, or purchased on the black market from with data resold by thieves after a data breach.

If you receive a debt collection call, experts advise consumers to demand written proof of the debt. Tell the caller that you only reply to debts submitted in writing with written proof. If the scammer does send a letter via postal mail of a debt you know is fraudulent, then you have written proof of the scam.

The second type of scam is a little trickier. Sometimes a valid debt collection company is calling with a valid debt that they think is yours, but really belongs to another person. Perhaps you changed your phone number recently, and the collections agency has confused you with the prior owner of the phone number. Perhaps you moved recently and the collection agency has confused you with the prior resident at our current address. A less than honorable collector wants to collect money and may pressure the person they contact into paying.

Either way, the best response is to demand that the debt collection caller fully identify their company. Then, demand written proof via postal mail that the debt is yours. Ask the caller for a phone number so you can call them back. Scammers hate this and will serve up a variety of excuses why you can't call them back.

In this case, Cedars-Sinai sent a bill to Mary Grace's old address, even though the medical center also had her current address on file. The medical center then sent the unpaid debt to two valid collection agencies... a case of one internal department failing to communicate with another department.

A couple days later, I received a follow-up e-mail from Mary Grace:

"... Cedars-Sinai knew I had a stellar record with them. They called the true collection agencies, had them retract my name and restore my credit ratings, and I paid [Cedars-Sinai] directly. I should receive letters from Cedars, and the agencies stating just that. Then I will look at my credit report to ensure that it was restored. Who knew that a phony call could end up exposing all this!"

And, NCO Financial Debt Collectors turned out to be a scam -- a phony debt collection agency. So, if you get a phone call from them, hang up and report it to the BBB and FTC.

Mary Grace's experience provides clear instructions for consumers about how to handle debt collection phone calls:

  • Asked the caller to identify their company
  • Don't trust the caller at their word. Don't share sensitive personal data over the phone. Demand written proof via postal mail of any debts
  • File a complaint with the BBB about any phony debt collector you encounter
  • Demanded written proof of paid debts
  • Demanded written proof from a creditor of debts sent in error to collection agencies
  • Demanded correction of erroneous entries to credit reporting agencies


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John Taylor

Excellent work George!


omg, who can keep track of all the ins and outs of this paper work!?


Rest assured that debt recovery melbourne would never do such a thing.


First of all, NCO Financial is a real company owned by JP Morgan/Chase it is not a scam. These morons will harass you day and night. And occasionally take someone to court. Their claim to fame is buying time-barred debts for pennies on the dollar. They will than harass you day and night with their real phone number and spoof calls (Google this). But they mistakenly think you will not take them to court. Have fun, I did.


NCO has been calling us, leaving messages that "any information we collect will be used for debt collection purposes only." Yeah, sure. We don't owe anyone a penny. We are seniors. Our house is paid for. Our cars are paid for. We pay off our one and only credit card each month.

This is so obviously a scam operation. I googled NCO and found this site. Thank you, George, for the good work you're doing here!

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