When struggling with debt, you may be overwhelmed by where to begin when tackling it. There are many options, companies, and services to choose from, especially when it comes to debt relief. However, there’s been a rise in news reports about less-than-reputable parties advertising “debt relief” services as a way to take advantage of people looking for help. With so many decisions to make, it can be difficult to separate fact from fiction. That’s why we’re here to settle the matter once and for all and answer the question, “Is debt relief a scam?” Read on to find out!
What Is Debt Relief?
Debt relief, or “debt settlement,” is the process of resolving unsecured debt by negotiating down the overall amount owed with creditors and paying the new agreed-upon amount in one lump sum. While you can do this on your own, many experts suggest working with a debt settlement company to contact your creditors on your behalf. These organizations employ experienced specialists who are often able to negotiate a better repayment plan or settle to reduce your debt to one lump-sum payment that’s less than the amount you currently owe. Debt relief through a debt settlement company can lower your overall debt, help you avoid bankruptcy, and give you a fresh start.
Is It a Scam?
The short answer: no! The process of debt relief is not only completely legitimate but also an excellent option for those who feel as though they are drowning in their debt. However, it begins to get tricky when deciding which debt relief company to partner with. While most debt relief organizations have an honest desire to help people achieve financial freedom, some are not and seek to take advantage of you through several debt relief scams.
Signs of a Debt Relief Scam
Luckily, these scams are easy to spot once you know what to look for! Below are some of the most common signs that a company is really a debt relief scamming operation.
Questionable Contact Details
Let’s be blunt: Anyone can make a legitimate-looking website, including debt relief scammers. To differentiate a fraud from a legitimate business, make sure that you can find a physical address for the company and a phone number that has a real person on the other end of the line when you call it.
Lack of Certifications
While certifications and accreditations are meaningful in any industry, debt settlement companies must fulfill several requirements to receive them. These requirements make the companies that have these accreditations extremely safe bets for you and your debt. When browsing a potential debt relief organization’s site, be on the lookout for accreditations such as IAPDA and BBB which demonstrates that their staff is held to a standard of excellence.
If the first time you hear about a debt relief company is through an illegal robocall or a recorded message that claims they can get rid of all your debt woes, then it’s probably not a company you want to call back.
You deserve the best possible outcome when it comes to debt relief. But if you get the feeling that a company is telling you what you want to hear, then it’s a surefire sign of a scam. According to the FTC, “No one can guarantee that your creditors will forgive your debts.” In fact, the FTC made it illegal for debt relief providers to misrepresent their services and to leave out any critical information a consumer would need to evaluate their services thoroughly. If a company’s results seem too good to be true, they likely are.
Especially popular with scammers, fake government programs or legal loopholes that miraculously absolve your debt often entice people to sign up for debt relief scams’ faux services. As a rule of thumb, if you owe any debts to the government, whether that be student loans, garnishments, or something else, the government agency associated with that debt will reach out to you in writing with any information you need to know.
Requiring Payment Before Explaining Their Services
Legitimate debt relief providers will always be upfront about their costs and offerings without you having to sign on the dotted line. If a purported debt relief organization is asking for your account information before they’re explained anything to you, they shouldn’t be trusted.
Real Debt Relief Is Closer Than You Think
“Okay,” you may be thinking, “I understand that debt relief as a concept isn’t a scam, but I don’t know if it’s right for me. Now what?” If you’re considering working with a debt settlement provider but are unsure of where to begin, request a custom debt relief plan from one of our debt specialists.
By taking the time to listen and walk through your unique financial situation, our debt relief experts will advise you on whether debt relief is right for you and provide you with a path to begin your debt-free journey.