Montana AG and Regional BBB Warning Businesses on Debt Collection Scam

The Montana Attorney General's Office and the Better Business Bureau of Eastern Washington, North Idaho and Montana today warned Montana businesses about a couple of bogus "debt collection" scams.

Under one scenario, the company contacts a Montana business and offers a debt-collection service. The alleged debt collectors instruct the Montana business to fax a copy of a check for payment of services and write "Attorneys' Fees" on it, then send the original check by U.S. Mail. The checks clear quickly, but the Montana business never receives any services.

In another pitch, the purported debt collectors contact the Montana business and offer to collect outstanding debts directly from consumers. The "collection agency" will then take a percentage as payment for its services and send the remainder to the Montana business. Ultimately, however, the debt collector never pays the Montana business.

"Too often, we think only consumers can be targets," said Assistant Attorney General Pam Bucy. "Scams like these are a reminder that businesses can be victimized, too."

"Do your homework prior to signing a contract, making a payment or giving sensitive personal or business profile information, making sure that you are dealing with a legitimate business. Don't cave in to high-pressure sales tactics," said Jan Quintrall, President/CEO, Better Business Bureau of Eastern Washington, North Idaho and Montana.

The BBB offered these tips for small businesses that may have difficulty collecting debts:

• Send the debtor a reminder invoice, stating that the debt still must be paid.
  
• Send a formal demand notice in a letter, demanding timely payment.
  
• Personally call or visit the debtor and ask for the full payment of the overdue bill.
  
• Hire a reputable collection agency. Remember that a collection agency typically takes a percentage of the money due as compensation.