If you haven't yet watched this video of a police officer in Midland, Texas messing with a scammer, please do. It's a perfect textbook example of what a scam sounds like. This one is posing as an IRS collector, and demanding immediate payment in... Apple money... otherwise the sheriff will come to arrest the consumer -- who in this case happens to be a police officer so he knows better.

Midland police officer talks with scammer - March 2018

What's incredibly sad is that it seems that thousands of consumers feel intimidated enough to fall for this scam and others like it. If they didn't, the scams wouldn't exist. Kudos to the many local news stations that have carried this story. We all need to teach elderly and/or less sophisticated consumers that there are crystal clear differences between legitimate collectors and crooks who conduct scams.

Legitimate collectors will NOT:

  • threaten arrest or claim the police are coming
  • use profanity
  • demand (or even accept) payment in Apple -- or any other -- gift cards
  • tell you payment must be received in a matter of minutes
  • avoid your questions and say things like, "you don't need to worry about that"
  • tell you that your phone number is being traced

Legitimate collectors WILL:

  • ask for information to confirm you are the person who allegedly owes the debt they are calling about (by law, they must do this)
  • tell you who they are -- if you ask, they will give you their company's name, address, phone number and website address
  • treat you professionally and with respect, and will listen to you
  • offer you options, and will try to work with you
  • accept checks or other forms of traditional payment
  • allow you to look them up/check them out, and then call them back
  • allow you to speak with a manager, supervisor or compliance officer if you are unhappy with your conversation with the collector

Note: Legitimate debt collectors do not have names like "Department of illegal enforcement and law"... in fact, I'm not aware of any collector whose name includes "department of."

insideARM Perspective

#CFPB, #FTC and others: THIS is the "chokepoint" you should be working on. Spend the resources and develop the partnerships needed to teach people about this. If nobody fell for these scams, they wouldn't exist.

The Federal Trade Commission has done a really nice job of producing warnings about individual scams, but are these warnings getting to the people who need them?

Also, while I'm at it... the so-called "Mini Miranda," which is required of third party debt collectors... it sounds scary. I am 100% for collectors being upfront about the purpose of the call. However, to me, having to make a statement that sounds to the average consumer like they are being arrested is pretty close to saying, "the sheriff is tracking your location and will be there soon" or "I am calling from the department of law and order." Clear and standard disclosures are good. But scary ones aren't. The debt collection conversation is hard enough for all involved -- can't we soften this up a bit?