A collection agency called someone I know who is 84 years old and suffers from memory loss and outright lied to her and stated she owed $40, 000.00 on an American Express bill. The collection agency told her they were going to reduce her debt somehow but needed another credit card number from a card she had recently received to proceed with the transaction. I spoke to the person on the phone and they told me the same thing that she owed $40, 000 and they would somehow reduce her debt if they give her a different credit card number. When I called American Express on the lady's behalf they told me her bill was a fraction of what the collection agency stated. In short she outright lied to get her credit card number. Is this legal? If she had given her the credit card number and she used it for a purpose different from what she stated wouldn't that be considered fraud? Who would I report this incident to?

This was not a collection agency, it was a crook, they do this and either use the number or sell it.

This person needs to cancel that number and get a new credit card number. You would report it to the local police
Also keep a eye on that bill, and also they need to keep a eye on their credit report if these people try and get new credit in their name

Scam, I get a scam every week from AOL asking me to reregister my account because all info was lost. AOL isn't sending me those e-mails, scammers are