Debt relief scams are real. If a debt relief program seems too good to be true, it probably is. No matter how desperate you feel and how much you are being harassed by debt collectors, you need to avoid lofty offers promising to solve all of your debt problems. Your problems might seem bad, but if you fall for a debt relief scam, they will get much, much worse.
There are no quick and easy solutions for getting out of debt. You have to buckle down and change your spending habits. There are legitimate plans that support you and make paying off your debts easier, but nothing makes the problem go completely away.
Complaints About Debt Relief Scams
There are plenty of people everyday that enroll in debt relief programs, hopping to eliminate their overwhelming monthly payments to creditors. The programs offer those drowning in debt hope that things can get better. They offer promises of paying only pennies on the dollar for money owed.
Unfortunately, a number of these programs are frauds. The Better Business Bureau (BBB) and National Consumer Debt Council (NCDC) receive complaints all the time about companies that have made big promises without delivering. If you want to avoid debt relief scams, there are 2 types of scams that you need to recognize and avoid.
Don’t Fall for Debt Settlement Scams
First, recognize the stunts these scams are trying to pull. You need to do your research before enrolling with any company. Instead of being misled by great promises, check into a company with the BBB or the NCDC. If there is a problem with a particular program, these organizations are likely to know about them.
The biggest scam the companies use is the debt settlement plan. These plans are appealing to those who are deep in debt because they promise to negotiate existing debt. Unfortunately, these programs do nothing other than make money for the scammers.
When contacting a debt relief company, make sure they give you all the details about the settlement process. You should understand the program from beginning to end before getting involved. In legit debt relief programs, your creditors will no longer be bothering you.
Fraudulent companies do nothing to prevent this from happening, so the harassing and abusive calls will continue, even if you enroll in the program. Companies trying to scam you might also urge you to stop paying your bills. If the debt relief company you are considering tells you to open a savings account and requests their fees come from this account, you are probably dealing with a scam company.
Beware of Debt Consolidation Scams
Scams might also offer to consolidate your debt. Though debt consolidation can be an effective way to deal with debt, you do not need to pay a third-party company to help you with the process. If a company asks for a large upfront fee for consolidation, you are likely being scammed.
The scamming company might also need your social security number, bank information or personal information before giving you information about their program. This information is not needed when you are in the information gathering phase.
You can avoid these types of debt relief scams by not providing this information to any company until you are ready to work with them.