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Beware of Zombie Debt Haunting Your Finances This Fall

By Contributor
October 24th, 2023

As Halloween looms closer, BBB serving Mainland BC & Yukon is reminding consumers to keep an eye out for “zombie debt”, also known as debt collection scams. Although quite rare, the BBB wants consumers to be prepared as scammers continually change their tactics to trick you out of your money.

How the Scam Works

You receive a call and the person on the other end claims they’re from a loan company, a law firm, or some government agency that’s connected to a purchase, subscription, or membership you signed up for months or years ago. They say you owe them money, even though you’re pretty sure you don’t owe a dime. Then, they start talking about lawsuits, seizing portions of your income, arrest warrants, or making you appear in court.

Now, imagine a softer approach: you get a surprise call from a debt collector, but they’re polite. They seem like they genuinely want to help you avoid going to court over some old debt. To make things right, they ask for a small “goodwill” payment, maybe even spread out in a few installments. Whether it is a kind or aggressive approach, these debt collection scenarios are enough to make anyone nervous and second-guess if they really owe money.

Local Example in Kelowna

A Kelowna man says a zombie debt appeared in the form of a strongly worded email back in December 2022, according to his report submitted to BBB Scam Tracker.  

The email, claiming to be from Telus, said he had a debt of nearly $500 from an overdue phone bill. The email claimed that a collections agency was getting involved and they would settle with a reduced payment of $170, if the debt was paid before December 31st.

Although the Kelowna man was initially worried about the debt, he decided to give Telus a call directly and provided the account number mentioned in the email. Telus confirmed that the account number was outdated, no longer active, and not linked to their name. The man deleted the email promptly.

BC Stats

On average, BC victims lose $100 when involved in a debt collection scam. The age demographics that most commonly fall for debt collection scams are 25-54. Out of all potential scams, debt collection scam occurrences are quite low. On average, debt collection reports (0.78%) pale in comparison to online purchase scam reports (36.68%), from 2020 until present day. Although they are more rare, it’s important to be prepared when you come face to face with “zombie debt”.

“No matter how friendly they act, don’t fall for it,” says Aaron Guillen, Media and Communications Specialist, BBB serving Mainland BC & Yukon.

“These so-called ‘debt collectors’ don’t have any real legal power, and most of the time, there’s no actual debt. If you make that payment, the person on the phone will take your money and vanish. You won’t be able to reach them again. Don’t let them trick you.”
Here are BBB’s top four tips on how to deal “zombie debt”:

  1. Ask for proof of the debt and of the agency calling. If you do owe money and aren’t sure if the caller is real, ask for their name, company, street address, and telephone number. Do not provide any bank account, credit card, or other personally identifiable information over the phone. If the collector is legitimate, they should have details on the accounts in question.
  2. Check your credit report. Check with Equifax Canada or TransUnion, two major consumer credit bureaus in Canada. This will help determine if there are outstanding debts or if there’s suspicious activity. If you’ve already given personal information to the supposed debt collector, place a fraud alert on your credit report.
  3. Ask when the debt was first owed. BC has a two-year basic liability limitation period. This means that if it has been two years (or more) since you incurred the debt, made a payment on the debt, or acknowledged the debt – the creditor who is owed the money can no longer take legal action against you, in an attempt to get you to pay. If you do end up truly owing a debt, be aware that your credit score will be negatively affected. For more info on how to deal with a legitimate debt collector, refer to the Government of Canada resource page.
  4. Just hang up. If you run a tight Google spreadsheet with all your costs and expenses and wholeheartedly know that you don’t have any outstanding loans, hang up. Don’t press any numbers or speak to an “agent.”

About BBB: 

The Better Business Bureau has empowered people to find businesses, brands and charities they can trust for over 110 years. In 2022, people turned to BBB more than 250 million times for BBB Business Profiles on more than 5.3 million businesses and Charity Reports on about 12,000 charities, all available for free at Local, independent BBBs can be found across the United States, Canada, and Mexico, including BBB Serving Mainland British Columbia, which was founded in 1939 and serves Mainland BC and the Yukon territory. 

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