Legitimate debt collection is highly regulated by federal law, however, there are numerous phony debt collectors who call people and threaten them if they do not pay alleged debts with serious repercussions including imprisonment. In many instances, scammers even attempt to collect on non-existent, phantom debts. Recently the Federal Trade Commission (FTC) sued Hardco Holding Group LLC, S&H Financial Group, Inc., Daryl M. Hall and Dequan M. Sicard alleging that they called their victims posing as lawyers and threatened them with arrest if they did not pay non-existent, phantom debts. The FTC has obtained a temporary restraining order against the defendants to cease their collections activities pending resolution of the lawsuit.
Subject to strict federal laws, legitimate debt collectors are permitted to call debtors, however, the law prohibits them from threatening imprisonment for the failure to pay a debt. It can be difficult to know when someone calls attempting to collect a debt if indeed they are legitimate or not, so the best course of action if you receive such a call is to not discuss the debt with the person calling, but instead demand that they send you a written “validation notice” by regular mail which describes the debt they allege you owe and includes a listing of your rights under the Federal Fair Debt Collection Practices Act. Never give personal information over the phone to anyone who calls you attempting to collect a debt. You can never be sure who they are. If you receive the validation notice and it appears to be legitimate, you may be better off contacting your creditor directly because the person who called you may not be representing the creditor, but may merely have information about the debt.