Debt collection fraud - the difference between reputable and disreputable debt collection agencies

You have just opened a debt collection letter and doubts are setting in: Is the claim justified? Can I trust the sender? Here, you will learn how to identify a reputable debt collection agency – and what you have to do if this is actually a scam.


Content: The most important facts at a glance:

How do I recognise a disreputable debt collection agency?

  • Be especially careful in the case of foreign accounts and spelling errors in the text.
How do I recognise a reliable debt collection agency?
  • Reliable debt collection agencies have a licence you can verify on the internet. 
How can I defend myself against dubious debt collection claims? 
  • If it turns out that the agency is dubious, you can file a criminal complaint.
Where can I get help in case of dubious claims?
  • Contact consumer advice centres, advisory centres for debtors or the BDIU Ombudswoman’s office.


1. How do I recognise a disreputable debt collection agency?

Receiving the first debt collection letter usually comes as a profound shock. However – you need to keep a cool head and pay close attention. The following three signs can help you tell at a glance whether or not the debt collection agency is a dubious company:

  1. Are there many spelling errors in the e-mail or letter? If yes, this is likely to be a scam.
  2. Does the letter include concrete information on the creditor (i.e. on the company whose invoice you have allegedly not paid) and detailed information on the basis of the claim? If not, you should be cautious.
  3. Is the money to be transferred abroad? If yes, proceed with caution – this points to possible fraud.  

2. How do I recognise a reliable debt collection agency?

You have now checked the debt collection letter for obvious suspicious signs – but still, you want to be absolutely sure: Is the sender really reliable? Then check the following three aspects:

  1. It sounds so simple but – to be on the safe side – you should first check online whether the sender really exists – or whether it is a fake company.  
  2. Debt collection agencies require a license for their work. Therefore, reputable debt collection agencies indicate that they are listed on the official website Look it up!
  3. Moreover, membership in a debt collection association, such as Bundesverband Deutscher Inkasso-Unternehmen, the German Federal Association of Debt Collection Agencies, is also a good sign because these companies undertake to comply with rules for fair debt collection.


3. What do I do if a disreputable debt collection agency threatens action?

Even if debt collection letters, at first, cause frustration, anger or fear, in many cases they are justified and turn out to be legitimate. Therefore, you should take a closer look at the letter before lodging an objection. If, in your opinion, the claim is unjustified you should take action – adjusting your approach according to whether or not the company is apparently reputable.

If the agency is a registered debt collection agency, you should contact the company and explain why the claim is not justified. This is particularly important in clearing up any confusion or misunderstandings.

In the case of non-registered debt collection agencies asserting obviously purely fictional claims, it is usually sufficient not to respond. Important: Do not click on any links and do not use any phone numbers that appear implausible – this can cause damage and/or cost.

4. How can I defend myself against disreputable debt collection agencies?

If you are certain that this is a scam – i.e. in the case of purely fictional claims asserted by a non-registered debt collection agency – and want to stop this scam, you can file a criminal complaint on grounds of fraud. Moreover, debt collection agencies are regulated by supervisory authorities which you can contact. Contact a lawyer for further information on both approaches.


Please note: If the letters regarding a claim which you think does not exist are from a registered debt collection agency, you should first contact the agency and dispute the claim because an unjustified request for payment does not always involve attempted fraud: For example, someone might be misusing your identity, or the debt collection agency might have mistaken you for another person of the same name.

5. Where can I get help in case of dubious claims?

If you need professional support, you have three good options in Germany:

  1. Advisory centres for debtors are experts in all financial questions that consumers may have. They know all about debt collection letters and can quickly determine whether the sender is a reputable agency.
  2. Moreover, consumer advice centres can also provide support in checking the claim and advice you on the further proceedings needed.
  3. Lawyers can also check the claim against you and can support you if you choose to take legal action.


Paigo tip: In case of conflicts with a debt collection agency that is a member in BDIU, you can also contact the BDIU Ombudswoman.

6. Conclusion

Even if it sometimes does not look like it at first glance: Most debt collection letters are fully justified and come from reputable debt collection agencies.

Therefore you should take a closer look at the letter: Does it contain all the relevant information, are there any spelling errors that stand out or is money to be transferred abroad? Then, you should go online and check whether the sender exists and is a registered debt collection agency. Only after these steps, can you assess whether or not a debt collection agency is reputable.

If you need support in this, you can contact the consumer advice centre or a lawyer. In the case of clear violations, you can file a complaint or inform the debt collection supervisory authorities. Moreover, you can contact the BDIU Ombudswoman’s office in the event of conflicts with a reputable company.


But please remember: In the event of seemingly unjustified claims asserted by reputable debt collection companies, you should, as a matter of course, definitely contact the sender and attempt to sort out the matter – maybe there has been a misunderstanding, or someone is misusing your data (identity theft). 

However, if the letter is from Paigo, you can be certain of one thing: We are reliable and abide by the BDIU rules for fair debt collection. That is why our letters always include all the important information – easy to understand and at a glance: At and via the Paigo app you will find fair and simple solutions to settle your debts. Should there be problems, such as identity theft or a mistake, make sure you contact us without delay – we need your help to sort these matters out.