Overbiffing: Latest Unfair Debt Collection Scam Posted by Association of Vermont Credit Unions on 3:39 PM

MSN Money reports on overbiffing as the latest outrage in unfair debt collection practices. In a recent case, regulators allege a New York debt collector tricked thousands of consumers into paying far more than they actually owed by fraudulently inflating consumer balances and using profane, abusive and illegal tactics to collect the fabricated bills. The term is called "overbiffing" because the scammers overstate a person's "balance in full," which is sometimes shortened to BIF. 

Buffalo debt collector Robert Heidenreich's collectors documented how much they "overbiffed" by using forms showing the actual balance due as well as the inflated amount that they told consumers was owed. In many cases, the false balance was hundreds, even thousands, of dollars more than the consumer actually owed.

In addition to artificially inflating debt balances, Heidenreich directed employees to mislead debtors about who was calling — encouraging his debt collectors to pose as lawyers. The debt collectors would warn the consumer had committed a crime and was about to be arrested, sued or served with legal papers because of a failure to pay an alleged debt. When the frantic consumer would ask how to stop the legal proceedings, the debt collectors would direct them to "attorneys" — actually just additional debt collectors — who would allow them to pay over the phone with a debit card. When consumers balked at paying the bill, the debt collectors turned abusive, engaging in threatening expletive-filled rants, sometimes threatening to call the debtor's employer or relatives.

The Fair Debt Collection Practices Act prohibits all of these actions. Debt collectors are not allowed to use abusive language, or contact anyone other than the debtor in their attempt to collect. Misrepresenting who collectors are, lying about the consequences of not repaying a debt and fabricating debt amounts are also prohibited under FDCPA, as well as other fraud statutes. Anyone who is contacted by a debt collector has the right to demand that the collector "validate" the debt in writing, showing how much is owed and to whom.

Read the story in entirety on MSN Money.