Avoiding Debt Relief Scams

A “holiday hangover” is what we experience once all the gifts have been exchanged, the parties have been attended, and the decorations have been packed away for another year. It’s that drop-off we feel after the rush of the holidays is over, and we must return to the routine nine-to-five. Very often that post-holiday reckoning involves confronting the charges we racked up on our credit cards. Debt is a growing concern for many consumers. In August 2023, the Center for Microeconomic Data reported that Americans’ credit card debt has surpassed $1 trillion for the first time ever. And this is at a time when interest rates have reached a 22-year high. Once mortgage and auto loan debt are factored in, combined consumer debt exceeds $17 trillion. Many consumers will resolve to decrease or completely eradicate their debt in the new year. Unfortunately, scammers are all too willing to take a consumer’s good intentions and use them to their advantage in a debt relief scam. A debt relief scam will often start with an unsolicited call, text, or email offering debt relief services. For an upfront fee, the scammer will promise to reduce or settle your debt and remove negative information from your credit report. Scammers are banking on the fact that being overwhelmed by debt will keep you from focusing on the obvious red flags of an unsolicited offer, upfront fees, and rosy promises. That’s why it is so important to know the signs of a scam and to make well-informed decisions that are not driven by emotion.

Signs of Debt Relief Scams

• Unsolicited Offers: Be suspicious of cold call solicitations.

 Thoroughly research any company before you provide your personal information.

 • Upfront Payment: Be extra cautious of demands for payment before any work can be done on your behalf.

• Promising Results: No one can predict how creditors may respond to debt settlement offers and favorable results cannot be guaranteed.

• Claiming Special Methods: Claims about exploiting little-known legal loopholes or new “government programs” should be viewed suspiciously.

• Instructions to Cease Contact with Creditors: Cutting off communication with creditors can have serious consequences, including accelerated debt collection efforts and lawsuits.

• Failure to Fully Assess Your Financial Situation: A scammer is not interested in understanding your complete financial situation before trying to help you because they don’t really intend to do anything for you.

There are legitimate debt relief companies that use well established and documented techniques to alleviate debt concerns and negotiate settlements. So, you may want to consider other options like exploring debt consolidation and working with a certified credit counselor at a non-profit.

*reprint from Fl. Dept. of Agriculture

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email contact@dmcconline.org.DMCC is located at 1330 SE 4th Ave, Suite F, Fort Lauderdale, FL 33316.