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Protecting Yourself: How to Avoid Debt Relief Scams

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Protecting Yourself: How to Avoid Debt Relief Scams 1

Understanding the Problem

While the internet has made many things easier, it has also made it easier for scammers to take advantage of people in vulnerable financial situations. Debt relief scams – where companies claim to be able to help you erase or lower your debt – are rampant.

The problem is so big that the Federal Trade Commission (FTC) has issued warnings about these scams for years. In fact, the FTC has even created a public service announcement video on the subject. Want to learn more about the subject? settle debt, you’ll find additional details and complementary information that will additionally enhance your educational journey.

Protecting Yourself: How to Avoid Debt Relief Scams 2

How These Scams Work

The typical debt relief scam involves a company that promises you that they can either erase your debt entirely or lower it by a significant amount. They will then ask you to pay hundreds or even thousands of dollars upfront as a “fee” or “deposit” for their services.

After you pay the money, the scammers will either do nothing or do something that you could do yourself, like negotiating with creditors to lower your payments or helping you apply for government programs. Either way, they will not erase your debt as promised. Worse yet, they will often disappear entirely and never return your calls or emails.

How to Avoid These Scams

The good news is that there are a few simple things that you can do to avoid falling victim to debt relief scams:

  • Never pay money upfront. Legitimate debt relief companies only charge you fees after they have settled some or all of your debt. Don’t pay a dime until they have done something.
  • Research the company. A quick Google search can usually tell you a lot about a debt relief company. Look for reviews from previous clients, complaints filed against them with consumer protection agencies, and news articles that might mention them.
  • Ask for references. A reputable company should have no problem giving you names and contact information for satisfied customers they have worked with in the past.
  • Consult a credit counselor. Credit counselors, who are certified by the National Foundation for Credit Counseling or the Financial Counseling Association of America, can help you navigate the world of debt relief and steer you towards legitimate, trustworthy companies.

    • What to Do if You Have Been Scammed

    If you have already fallen victim to a debt relief scam, there are some steps you can take to try to rectify the situation: Complete your reading experience by accessing this recommended external resource. In it, you’ll find valuable and additional information to broaden your knowledge of the subject. debt relief, check it out!

  • Contact your bank or credit card company. If you paid the scammers with a credit card or bank transfer, contact your financial institution and explain what happened. Depending on the circumstances, they may be able to issue a chargeback or freeze the scammers’ account.
  • Contact the authorities. The FTC is the primary agency responsible for dealing with debt relief scams. You can file a complaint with them online or by phone.
  • Speak with a lawyer. If you have lost a significant amount of money, you may want to consider hiring an attorney to help you recover those funds.

    • The Bottom Line

    Dealing with debt can be stressful, but it’s important that you don’t make things worse by falling victim to a debt relief scam. Take the time to research any companies you are considering working with, and never pay money upfront. Doing so will go a long way towards protecting yourself and your finances.

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