Avoiding Debt Relief Scams

Is there any lower form of individual than one who would take advantage of another person’s misfortune? While it’s likely everyone would agree it’s difficult to get any lower than that, the fact remains such people are out there.

Worse, they’re often really good at making their offers look promising — until you realize they aren’t. Hopefully, this information regarding avoiding debt scams will help you come to that realization before you sign up for a bogus program.

Common Red Flags

Debt relief scams tend to have a number of commonalities, which can make them easier to spot. To that end, the U.S Department of Justice advises the following:

Fraudulent debt relief companies will often make claims of being able to negotiate a one-time settlement with creditors that will reduce a consumer’s principal by fifty percent or more. The Consumer Federation of America, an association of non-profit consumer organizations, warns that such a promise is a virtual impossibility.

If a company offers a ‘one size fits all’ solution, what they are really offering is a ‘no size fits anyone’ problem.”

Perhaps predictably, the Federal Trade Commission agrees, and further admonishes consumers to avoid organizations engaging in any of the following behaviors.

  • Charging fees before it settles your debts
  • Guaranteeing it can make your unsecured debt go away
  • Telling you it can stop all debt collection calls and lawsuits
  • Avoiding sending you free information about its services unless you provide personal and financial information, like your credit card and bank account numbers

Protecting Yourself

Common-sense solutions tend to work best here. One of the smartest moves you can make is doing some background research on a company before you enroll. Resources such as these Freedom Debt Relief reviews can offer you a great deal of insight into the reputation of a company you’re considering and help you learn more about what to expect.

In addition to looking up consumer reviews, you’ll also want to ask any prospective companies lots of questions — about their fees, some settlements they’ve been able to negotiate in the past, the process, the risks and more. Get this information in writing, too.

Consider Trying Other Approaches

Here’s something else dishonest companies won’t tell you. There are many different approaches to dealing with debt problems.

To that end the Justice Department says:

“If you have trouble making credit card payments, immediately call the creditor to work out a payment plan. If that is unsuccessful, a non-profit credit counseling service may be able to help you. An excellent resource for locating a local credit counseling service is the National Foundation for Credit Counseling at http://www.nfcc.org.”

Of course, there will be instances when situations are beyond working out payment plans on your own, and/or beyond the abilities of strategies like credit counseling and credit management to resolve the issues. Debt relief can often be effective in such instances, especially as an alternative to bankruptcy.

Again though, you have to be careful to review the credentials of any agency before you agree to sign with them. Another useful resource in this regard is the American Fair Credit Council. The trade association of the debt settlement industry, its mission is ensuring the ethical treatment of consumers seeking to resolve their debts through debt settlement.

Beware the Robocall

While we’re on the subject of avoiding debt relief scams, it’s quite common for interlopers to contact you via robocall. However, doing so is a violation of Federal law, unless you’ve agreed to accept them.

Don’t press “one” or any other button on your phone when you get a robocall. Doing so “tells” the algorithm it’s hit a live number and you’ll actually get more calls. Just hang up and block that number.

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