Pernicious Scam Targets Bankruptcy Filers

A new scam targeting bankruptcy filers has emerged in several states under which con artists, posing as the intended victim’s bankruptcy attorney or a staff member, are calling and telling the consumer to wire money immediately to satisfy a debt. The callers may threaten the consumer with dismissal of their ongoing bankruptcy case, discharge revocation, or even arrest. Callers tend to be sophisticated and well-informed with knowledge of details about the case, perhaps through access to PACER, including the judge’s name and case status.

One bankruptcy attorney reported the following scenario. His client received a call during non-business hours using “spoofing” technology to make it appear on Caller ID that the call was coming from the bankruptcy attorney’s office. The caller identified himself as an associate of the intended victim’s attorney and explained that a creditor was opposing discharge and that, in order to prevent unraveling of the case, the attorney had negotiated a settlement outside bankruptcy under which the debtor must immediately wire money directly to the creditor. Failure to do so was likely to result in dismissal or discharge revocation. Fortunately, the client suspected a scam and hung up.

In light of this and other scams, it would be wise for bankruptcy attorneys to explain to all clients the specific method of communications they employ when contacting clients. Clients should be warned that under no circumstances would a bankruptcy attorney or staff member telephone and ask for a wire transfer immediately to satisfy a debt. Nor would the bankruptcy attorney or staff member ever threaten arrest if a debt is not paid. Clients should be advised that the best thing to do upon receipt of one of these calls is to hang up without giving out any personal or account information and contact their bankruptcy attorney as soon as possible. Recipients of these calls should also contact their state Attorney General’s Consumer Assistance Program.