​​Chances are, it is not a scam.  If it is not a scam, the account will show up under the debt buyer’s name on one of your credit reports within 60 days.  You can match the debt buyer account to the original creditor’s account by comparing the original creditor’s sale or transfer date to the debt buyer’s account open date as well as the amount.  (If both the original creditor and the debt buyer are reporting the account, you can dispute the original creditor account as “duplicate” and request its removal from your reports.)

These debt buyer companies buy what is referred to in the industry as “paper”, meaning they purchase the right to collect your debt.  These companies usually buy tens of thousands of unsecured debt accounts at a time for pennies on the dollar.  Your account information and a few statements and not much else are transferred to the debt buying company. 

Although they are required to verify the account information, they generally take minimal steps to do so. Some debt buyers, such as Portfolio Recovery Associates, LLC and Midland Funding, LLC, have been previously fined by the Consumer Finance Protection Bureau (CFPB) for failing to do so and consequently attempting to collect debts which were inaccurate or unenforceable.  Accordingly, when they file a lawsuit against you to collect the debt, you may have defenses of which you were not aware.  Most of the defenses, although fact driven, rely upon case interpretations of the law which is why it is always a good idea to have the assistance of an experienced debt defense attorney.​​​​​​​​​​