Ready for Relief: A Guide to Avoiding Debt Relief Scams

Published April 7, 2018

When your phone rings and it’s a number you don’t know, one of the first thoughts that crosses your mind is that it’s a scammer.

If you’re curious enough to answer, it’s usually easy sniff out the validity of the call within seconds. But how good are your internal scam signals when you’re face-to-face with someone talking about something you have very little knowledge about? Would you even know if you were getting scammed or not?

The average person knows very little about debt relief and the process that goes into it. Some less trustworthy debt relief companies know this and try to prey on naïve customers, forcing them into unfavorable out-of-pocket costs or scamming them out of money completely.

The easiest ways to realize a debt relief scam usually consist one or more of the following:

  • Random, unsolicited phone call.
  • Fees charged before any of your debt is relieved.
  • Guarantees to make ALL your debt go away.

Unsolicited Phone Call

We all get those calls from random phone numbers or unknown callers, but sometimes it piques enough interest to answer the phone and see who it is. It’s not like they can grab you through the phone, right? When scammers go fishing for targets, they could essentially roll through the phone book and likely get on the line with someone who has some form of debt. According to a report by The Pew Charitable Trusts, 80 percent of Americans carry some form of debt such as a mortgage, credit card debt or student loan debt. So, the odds are pretty good they’ll get in touch with their desired type of target.

Whether you have a mortgage, student loan or some other form of debt, could you imagine what life would be like if you didn’t have that monthly payment? A lot of your financial worries would slide down the drain. That’s exactly the feeling that these scammers prey on when they’re trying to sell you on their debt relief “program.” They play into your emotion and how they can change your life, for only a small upfront fee. That’s an immediate red flag and you should hang up the phone.

Upfront payment

What any debt relief agency trying to take advantage of you won’t tell you is that the Federal Trade Commission (FTC) banned upfront payments for debt settlement in 2010. The only wrinkle in this rule is that face-to-face sales are not included in the ban, so make sure any person looking for a sit down is from a reputable company and you’ve done your research on them.

Most scammers will try to get full payment up front before they do anything, or some even try to tell you to pay half now, half when the debt is clear. That doesn’t sound like too bad of a proposition until your contact goes MIA, your debt is still staring you in the face and you never see your money again. Legitimate debt relief companies will abide by the FTC’s ruling and will request payment once a debt has been cleared.

The Guarantee

The popular saying is that the only guarantees in life are death and taxes. Any company promising, they can get rid of 100 percent of your debt is trying to pull a fast one on you. Even one of the more reputable companies in the space, Freedom Debt Relief warns against scams on their website, listing “guarantees” as an overarching red flag.

Debt relief companies cannot guarantee anything let alone guaranteeing to erase all your debt. Why? Because it is not solely up to them. The debt settlement process is just that — a process. It is a back-and-forth negotiation between your debt relief company and your creditors to come up with a suitable payment that both sides agree to.

So, when that random phone call comes your way and they are offering a guaranteed ticket to the debt relief promise land for a small cost upfront, then it’s best to say ciao, hang up the phone and start doing your own research into a debt relief company that can truly help you, not one that’s trying to scam you.

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