Washington State Department of Financial Institutions

News Release

Thursday, March 14, 2013


Lyn Peters, Director of Communications
PH (360) 902-8731 lyn.peters@dfi.wa.gov

Deborah Bortner, Director Division of Consumer Services
PH 360-902-0511, deborah.bortner@dfi.wa.gov


Washington Department Of Financial Institutions Warns About Collection Scams

Washington regulator identifies increase in reports of collection scams threatening state’s consumers

OLYMPIA – 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 beginning of last year, the 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. In some cases, the caller has had personal information about the consumer such as name, address, date of birth, and even social security number.

"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."

Consumers should be on high alert when receiving a collection call about a debt if the consumer has any question about the validity of the debt. Scam collectors have claimed to be from law offices, the FBI, and other law enforcement and governmental agencies.

"Because of the aggressive and abusive tactics used," DFI Director of Consumer Services Deborah Bortner explains, "otherwise cautious and careful consumers end up falling for the scam and give away their hard-earned money; thus becoming victims."

Warning signs that the debt may be invalid may include:

The Fair Debt Collection Practices Act, which is enforced by the Federal Trade Commission, prohibits debt collectors from using abusive, deceptive, and unfair collection practices. This includes, but is not limited to, restrictions on what a debt collector can say, such as the use of obscene or profane language, threats of violence or legal action that the debt collector is not legally permitted to take, and false representations. Debt collectors are also restricted as to the time of day they may call consumers, and they can only charge certain authorized fees.

DFI urges consumers to independently verify the validity of any questionable debt and not to send money or provide any personal information such as bank account information, credit card numbers, or their social security number.

Report Violators

About DFI
www.dfi.wa.gov ▪ 360.902-8700 ▪ 877-746-4334
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders and securities brokers and dealers. The department also works to improve financial education throughout Washington through its outreach programs and online clearinghouse www.dfi.wa.gov/financial-education. In addition to posting information about licensees and administrative actions, DFI uses the Web and social media to provide financial education information: http://www.twitter.com/FinEd4All, www.twitter.com/DFIConsumers, www.finlit.blogspot.com, www.youtube.com/user/WADFI, www.homeownership.wa.gov.

About Division of Consumer Services
www.dfi.wa.gov/cs ▪ 360-902-8703 ▪ 877-746-4334, x 8703
The mission of the Division of Consumer Services is to protect consumers from illegal and fraudulent lending practices. The division accomplishes its mission through licensing, licensee examinations, investigations, and enforcing selected state and federal statutes and rules. Consumer Services regulates the business activities of consumer loan companies, mortgage brokers, money transmitters and currency exchangers, as well as check cashers and sellers, also known as "payday lenders." The Division is entirely self-supporting, with funding provided by licensing, auditing, and policing of regulated businesses and individuals. No money is received from the state General Fund or other public revenue source.

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