There is no such thing as a fake lawsuit. Even if the debt is fake, the court process is legitimate, and the court’s orders are binding. Scammers can cause significant financial headaches, both now and in the future. You must be vigilant and speak up for yourself because when scammers file a lawsuit based on invalid debts and you allow them to operate unchallenged, the false debt can place you in a severe financial bind.
Never ignore court papers that involve an alleged unpaid debt, even if you do not recognize the debt or you know you already paid it. Ignoring the matter will only cause much greater problems. You must always properly respond to the lawsuit by filing an answer, and you can request the court to dismiss the invalid claim against you. Otherwise, the scammer can tell their story without rebuttal, and they may even get the right to collect from you. If you do not respond and take part in the legal process, the court can issue a default judgment against you, even if the debt is invalid.
Your immediate step when you receive notification of a debt collection lawsuit must be to contact a debt collection defense lawyers. They can review the details of the complaint against you and determine whether the basis of the lawsuit is valid. They can then take appropriate action to have the case dismissed or defend against the claims.
What are fake debt collection lawsuits?
Scammers know that you may be afraid of a debt collector. Without knowing your rights, you may be very vulnerable to whatever they try to do to you.
One of the common scams that fictitious debt collectors use is to make you believe that you will be in extreme legal trouble if you do not pay your debt. They may call you, pretending to be an attorney, and tell you you can go to jail for your unpaid debt. That is patently untrue, but you may be afraid when you think that someone has the power to punish you. Fictitious debt collectors can deliberately confuse you to make you unsure of yourself.
The scammer may invent a debt that you were not responsible for in the first place. You can be shocked when they claim you owe money to someone you never did business with. However, they insist you owe money and threaten to sue you over the false debt, and not knowing the legal process, you may freeze and panic. Remember that scammers are very good at what they do and are skilled at seeming authentic and persuasive.
Fake debt collection lawsuits do not necessarily have to involve debt that never existed in the first place. You may have owed the debt to a creditor at some point.
Debt collectors have the burden of proof to show that the debt is legitimate. If they do not have the documentation that evidences the debt, it is as if it does not exist. Then, the lawsuit will be similar to a fake debt collection lawsuit.
Companies like Portfolio Recovery Associates and Midland Financial are notorious for filing lawsuits without the documentation to back up their claims. These companies hope you do not show up in court to fight back. Then, they will get a judgment against you and seek to collect on it in the future. Ninety percent of people sued for unpaid debts do not attend court, allowing the debt collector to score a big win and have the right to collect from you for as long as the judgment is valid. Although scammers do not necessarily file these lawsuits, they have the same effect.
How do scammers use fake debt collection lawsuits?
Ideally, the scammer wants to get money from you without even going to court and wants you to affirm the debt or pay them to go away. Here, their primary tools are fear and intimidation. Since they cannot outright take your money, they want you to give it to them willingly.
The lawsuit is often a pretext. The scammer wants to get a default judgment against you and will use the lawsuit threat to make you more compliant. They can also get a court to side with them when you do not fight.
Once the scammer gets a judgment against you, they can garnish your income or seize your bank accounts. They can even push you into bankruptcy, where they can receive some of your assets in a Chapter 7 liquidation.
Warning signs of a fake debt collection lawsuit
Always ask the purported debt collectors as much as possible about what they claim is the debt you owe them. Whether the debt is real can be revealed in the answers they give or do not give you.
Here are some red flags that may indicate that debt collectors are trying to execute a scam:
- They threaten you with criminal charges (you can never be prosecuted criminally for failing to pay your debt).
- They will not give you any answers when you try to ask them questions about your debt.
- They ask you to provide them with personal financial information, which you should never give anybody.
- You cannot get clear contact information and mailing addresses from them.
Remember that no one affiliated with the United States government will call you on the phone. The government does not make phone calls out of the blue – they send letters. If something seems wrong to you, chances are that it is. You should always be skeptical when someone randomly calls you out of the blue.
The scammer is often trying to obtain your personal financial information. For example, they may tell you they take credit cards over the phone, and you can give them your information right now. This way, they will not even need to file a lawsuit and can make hefty charges against your credit card without waiting for a court judgment.
The Consequences of Falling For a Fake Debt Collection Lawsuit
Consumers may face significant consequences if they fall victim to a bogus debt collection lawsuit. Even if a debt collection lawsuit seems fake, you cannot ignore it. If someone has taken you to court, you must participate in the legal process to defend yourself. Failing to respond to the legal process can allow the other party to win a default judgment against you. Then, they can try to collect the judgment by doing things such as garnishing your income.
While it seems unfair that you must do anything, this is how the law works.
Be Careful About Paying a Fictitious Debt
Debt collectors are trying to get you to affirm whatever they say, so you must be careful about
doing anything that may conclusively indicate that you owe the debt. For example, if you paid a fictitious debt or acknowledged that you owed the money, they may use that as proof when they sued you.
Respond to any initial notice that you owe money by disputing the debt. This way, you have it on record that you object to what the purported debt collector is doing.
Steps to Take if You Suspect a Debt Collection Lawsuit is Fake
Ultimately, you can file a claim against anyone who subjects you to a fake debt collection lawsuit, as it is squarely against the law. However, the first steps to take are those that protect you from the immediate harm that the fake debt collector poses to you.
You need to ask the debt collectors for as much information as possible, tell them to write everything, and send you a letter detailing what you owe. Fake debt collectors will rarely do that because it gives you evidence that you can use against them in a criminal prosecution.
Always make sure that it is apparent which debt you are supposed to owe. It is a definite sign of trouble if you are unfamiliar with the initial creditor’s name. If there is a creditor whose name you recognize, try to call them so you can ask questions about whether the debt is legitimate.
Hiring a Lawyer for False Debt Collection Lawsuits
Hiring a lawyer for your debt collection lawsuit is not required. Still, you stand the best chance of successfully navigating the legal process when you have an experienced attorney representing you. A lawyer will know which relevant federal or state law to use to sue the debt collectors. They will work to maximize your financial compensation under the law and stop all wrongdoings.
A debt collection lawsuit attorney only receives payment if you win your case. You never need to pay this type of lawyer out of pocket and may even receive attorney’s fees as part of your settlement or award, meaning you can keep more (or all) of it.
However, it may be difficult to sue a scammer. You may have trouble locating them in the first place, even to file a lawsuit. When you find them, the scammer may not have any assets for you to go after. The key is that you are vigilant and do not fall for the scam in the first place.
How to Protect Yourself From Fake Debt Collection Lawsuits
The number one thing is always to fight back. The debt collector is counting on you not to take action to defend yourself; therefore, you must participate if you get a letter that a creditor is suing you. If you do not show up, you will end up with a judgment against you because you did not take advantage of the due process by the law.
You should also research the entity suing you when you receive notice of the lawsuit because you may see online that a similar entity has filed false and fictitious lawsuits. You should check with your state attorney general’s office for any questions. The Federal Trade Commission can also answer questions that you may have and provide you with information about your rights.
In the end, the most powerful consumer is an educated one. Do not take anything for granted; always research before you do anything.
Legal Resources For Consumers Dealing With Fake Debt Collection Lawsuits
The best thing you can do is educate yourself to the fullest extent possible when dealing with fake debt collectors. They try to exploit your lack of knowledge of the law and your legal rights.
The federal government offers numerous resources to help you learn more about potential scams that can affect you. The Federal Trade Commission publishes several guides showing you how to spot a scam. The FTC has a new fraud reporting platform where you can speak with a live representative over the phone. You may want to call them to report the potential fraud and hear what they say. In addition, the Consumer Financial Protection Bureau also publishes information about what to be on the lookout for in a possible scam.
Your state attorney general’s office is also a great place to start when trying to learn about possible fraud. The California Attorney General publishes a wealth of information for you to learn about what to be careful of and your legal rights.
The most important lesson is this – if something seems wrong to you, trust your instincts. Do not go along with something out of fear just because someone calls you up out of the blue and begins threatening you. If you need guidance, contact an experienced debt collection attorney, and they can review your situation and advise you whether it is possible to file a lawsuit of your own.
Consultations with a Debt Collection Attorney are Free
Facing debt collection can be overwhelming, but you don’t have to go through it alone. One of the first steps you can take to regain control of your financial situation is to consult with a debt collection attorney. The good news is that many attorneys offer free consultations, allowing you to discuss your case without any financial burden.
It’s an excellent opportunity to seek professional advice and explore your options. Don’t hesitate to reach out California consumer protection law firm and schedule your consultation today.