Better Business Bureau Warns of Specific Scam Debt Collector

The national office of the Better Business Bureau (BBB) has warned consumers about debt collection calls coming from a company calling itself “National Fraud and Investigation Agency.” The BBB notes that the company is not real and that the calls are a debt collection scam.

The calls are asking for payments on defaulted online payday loans, a common debt sector for scammers. One consumer told the BBB that she never even took out a payday loan.

Fortunately, that consumer provided quite a bit of information to the BBB and the group began an investigation. The BBB could not find “National Fraud and Investigation Agency” registered anywhere. When one possible address was found, the group discovered it was actually the location of a courthouse in Cincinnati.

The name and tactics mirror a major finding of last year’s analysis of debt collection complaint data by insideARM.com. When mining the data, we discovered that there are, in effect, two separate debt collection industries in the U.S. One is comprised of legitimate companies, the other of rogue actors.

The rogue debt collection agencies will often use names similar to the one found in the BBB warning. We found numerous examples of consumer complaints against “collection agencies” calling themselves names like “Department of Crime and Punishment” and “Bureau of Crime Investigation.”

Online payday loans have also recently been shown to be especially susceptible to debt collection scammers. In a high profile case last year, the FTC shut down a scam that was operating in India and using contact information only from payday loan sites to extort payments from consumers who had never even completed the loan application process.

It is important for the ARM industry to know exactly what is going on with these scams, because they will be mentioned in the press and even by consumers during the collection process. It’s always helpful to note that those cases are straight up fraud not to be confused with legitimate debt collection efforts from a legitimate business attempting to collect legitimate debt.