The Washington State Department of Financial Institutions (DFI) Division of Consumer Services is warning consumers that scammers are targeting consumers with threats of arrest, criminal prosecution, wage garnishment, and high fees for allegedly unpaid personal loans and payday loans that may have been paid off years before or never existed at all.

Since the start of 2012, the Washington State Department of Financial Institutions (DFI) has received more than 100 complaints from consumers reporting being contacted by a purported collection company or debt collector attempting to collect on a non-existent debt with threats of arrest, criminal prosecution, wage garnishment and high fees for unpaid personal and payday loans.

In many cases, those loans never existed or were paid off years earlier. The behavior violates the Fair Debt Collection Practices Act.

The callers in some cases has had personal information about the consumer such as name, address, date of birth and even Social Security number. They've also claimed to be from law offices, the FBI and other law enforcement and governmental agencies.

"It’s appalling how many people will try to prey on others just to make a few bucks," DFI Director Scott Jarvis said. "We hope to limit the damage to Washington consumers by raising awareness of this scam, which is criminal."

Warning signs that the debt may be invalid may include:
    •    Caller unwilling to provide written validation of the debt;
    •    Caller won’t provide a mailing address;
    •    Caller threatens criminal sanctions, violence, or uses profane language or other scare tactics; and
    •    Consumer does not recognize the debt.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry