Avoiding Debt Relief Scams
A guaranteed offer to help you clear all of your debts for pennies on the dollar can sound really good when you’ve laid awake night after night trying to figure out what to do about them.
In fact, it might even sound too good to be true.
And frankly, it should.
While yes, it is indeed possible to settle many of your unsecured debts for less than you currently owe, “pennies on the dollar” is a gross exaggeration of what’s possible. Anyone making such claims should be viewed with suspicion if you’re going to be successful at avoiding debt relief scams.
There Are No Guarantees
Every respectable debt relief company out there will tell you there’s no such thing as a guaranteed result in their industry. Even though they may have dealt with a particular creditor many times in the past, each situation is determined on a case-by-case basis. What worked for your next-door neighbor might be impossible for you — and vice versa.
Anyone guaranteeing results should be viewed with suspicion.
Up Front Charges Are Illegal
Federal law makes the collection of any debt settlement or debt negotiation fees before services are provided illegal. The Federal Trade Commission has ruled payment may only be collected after a debt has been settled. You must also have a written settlement agreement in hand and have made a payment to the lender based upon the settlement agreement.
Anyone trying to get you to pay up front for those services is operating in violation of the law.
Collections and Litigation Remain Possibilities
You might well be enrolled in one of the most credible debt relief programs out there and still have to deal with collections calls and threats of lawsuits from creditors. Yes, most lenders will chill once they’ve reached a settlement agreement with you, but until it happens, you’ll still be on their delinquent list and subject to the actions in which a collector might lawfully engage.
Anyone telling you they can make collections calls and lawsuits go away should also be seen warily.
You Don’t Have to Pay for Information
Insisting upon the provision of credit card information before sending background information about their “services” is a timeworn tactic of scam artists. Moreover, they are required by law to tell you about how long it will take to see results and how much it will cost to have them working on your behalf. They must also apprise you of any possible negative consequences — all before asking you for any financial information whatsoever.
Anyone asking for a credit card number right off the top is probably trying to steal from you. This includes requests for “voluntary contributions.”
No Need to Sign Up Right Away
Choosing to enter a debt settlement program is a decision one should make only after careful consideration. Yes, doing so does hold the potential to help solve your money problem. However, there are some rather rigorous parameters you’ll have to observe. Meanwhile, scammers are intent upon getting as much cash from you as they can, as quickly as possible.
Anyone pressuring you to sign up right away is likely to be more interested in advancing his or her own financial position than they are in helping you improve yours.
Avoiding debt relief scams takes attentiveness, diligence and a modicum of common sense. These tips will help you recognize those who would try to steal from you. You’ll also benefit from reviewing the debt relief, negotiation and settlement information offered by the Federal Trade Commission.
Thank you,
Glenda, Charlie and David Cates
