Spotting a Debt Relief Scam

Individuals drowning in debt look for a life preserver in many forms, and sometimes it can result in a costly mistake. The Federal Trade Commission (FTC), warns consumers to be weary of debt relief and credit repair scams that can target individuals with lofty credit card debt by falsely promising to negotiate with creditors in an offer to settle or reduce their repayment obligations. But how can we discern a legitimate business service from a fake one? The FTC has brought countless actions against unscrupulous or bogus credit-related services over the past ten years, and we can learn what to be on the lookout from these instances and how to spot a debt relief scam. A few pieces of advice we learned about spotting a debt relief scam are:

Don’t Pay Money Up Front

A legitimate debt relief company will NOT require an upfront fee for their services. In fact, this is an illegal practice. Ethical companies will not charge a fee until your debt has been resolved or settled.

Don’t Accept Guarantees

Many of the unlawful debt relief and credit repair schemes falsely promise to reduce or eliminate debt and then do absolutely nothing. Even in situations where the company operates fairly and honestly, no one can promise or guarantee that a creditor will forgive your debts.

If It Doesn’t Feel Right, Don’t Agree

There have been instances where phony debt relief companies have misrepresented themselves as being connected with the government or other establishments to increase their perceived validity. One such debt relief fake in 2014 even went as far as to claim personal endorsement from the President of the United States by adding an audio recording to its promotional video that he “approved this message”.

If you feel that you have been targeted by the actions of a company that falsely promises to reduce or eliminate your monthly payments you should contact your bankruptcy attorney to see if you have grounds for seeking damages or other legal remedies. You should also call a bankruptcy lawyer before signing up for a debt relief program to make sure that you are dealing with a valid company, or do your own research on the company’s reputation. You can also help to stop debt relief scams by contacting the FTC with any information on shady business practices.

If you are being bullied by a debt collector, ask a knowledgeable Houston bankruptcy lawyer for guidance.