Don’t Be Scammed By A ‘Phantom Debt’ Collector


You get a call from an unknown number. The caller identifies himself as a debt collector and informs you that you have an outstanding debt of over $5000. You stop in your tracks, confused—is it interest from a phone bill? Student loans? Just as you’re about to ask what it’s for, the caller barks at you, threatening to bring you into court if you do not pay immediately. Terrified and alarmed, you pay. Later, you find out it was a scam—a “phantom debt” collector.

What is Phantom Debt?
Phantom debt is a term for debt that either does not exist, has already been discharged, or has been artificially (and illegally) inflated, but somehow continues to haunt the debtor. When collectors try and collect phantom debts, they are violating the Fair Debt Collection Practices Act (FDCPA), which prohibits collectors from “misrepresenting” the amount that you owe. Knowing your rights and where to report suspicious activity is an important first step in battling phantom debt collection.

What to Do When You Suspect a Phantom Debt Collection Scheme
If a collector contacts you about an unfamiliar debt and threatens you with serious consequences if you do not pay, be suspicious! Here are some steps you should take to protect yourself from phantom debt collectors:

  1. Ask for proof: The first time a collector calls about an unfamiliar debt, ask for a validation letter confirming the details, including the collection agency’s name, physical address, and phone number. You have 30 days from the date the collector first contacted you to request validation of the debt. After you have requested validation, the collector must provide proof that it owed the debt or has been assigned to collect it by the original creditor. If the collector cannot provide this proof, it cannot continue to try collecting from you. Here is a sample letter you can use.
  2. Check your credit report: Make sure to ask the collector to provide the name of the original creditor. With that information, you can check to see if the original account is listed on your credit report. If the collector lists debts not listed on your credit report, be sure to challenge it.
  3. Contact the original creditor: Let the original creditor know that a collection agency has been trying to get you to pay a debt and that you have no record of the account. The supposed creditor will be able to tell you if the account is legitimate and if it has been assigned or sold to that collection agency.
  4. Stop collectors from calling you: You can stop collectors from calling you about phantom debt by sending a written cease and desist letter (sample here) requesting them not to contact you. When the collector receives your letter, it can contact you one final time, in writing to let you know that it won’t collect the debt anymore, that it may take certain actions against you, or that it will definitely take certain actions against you.
  5. Report the incident: If you think you’ve been contacted by a phantom debt collector, you can call us with questions and/or report the incident to OAG:

Learn more about your rights with OAG’s free resource on debt collection and how to protect yourself against other scams at