Ken Paxton
Consumer Protection

Beware of Phony Debts

A number of consumers have turned to our office in confusion because they have received demands from collection agencies trying to collect for debts that do not seem to exist. Whenever a consumer complains about an unauthorized debt or charge, we immediately suggest the possiblity that the consumer's identity has been stolen. You can read about our recommendations for preventing or dealing with identity crime on our Identity Theft page and on our website

In some cases, however, no proof can be produced that a debt even exists. It appears that some collection agencies, sometimes little more than PO boxes, may hope that an intimidating letter will frighten the consumer into paying off a small but totally bogus alleged debt. While we cannot provide private individuals with legal advice, we do caution these consumers that in addition to taking steps to protect themselves from ID theft, they should demand proof that an unfamiliar debt even exists.

Any legitimate lender can readily produce a paper trail to show that a credit transaction actually took place. You can read about fair debt collection practice in our Debt Collection consumer topic, and report violations by a debt collection company to our office at

ABOUT CONSUMER ALERTS - The Office of the Attorney General accepts consumer complaints about businesses. When a pattern of complaints warrants intervention, the Attorney General can file a civil lawsuit under consumer protection statutes, sometimes with the result that a company is required to pay restitution to consumers -- see our Major Lawsuits page. However, when a consumer is swindled by a con artist, filing a complaint cannot help. Civil litigation can sometimes put a very unscrupulous business out of action, but often cannot produce restitution.

Individual con artists generally fall under the jurisdiction of a criminal prosecutor -- in Texas, this is the district or county attorney. But even when they are charged and convicted, these individuals usually have spent the money as fast as they have stolen it. A person who is the victim of fraud should report the incident to the police or sheriff. But by far the best thing is for consumers to be aware of fraud, so they are not swindled in the first place. For this reason, the Office of the Attorney General posts these Consumer Alerts about possible scams and schemes that come to our attention through citizen contacts to our office or other sources.