Debt relief scammers prey upon those who are already in difficult financial straits, hoping to con them into paying big bucks in return for reducing their current debt burden. While there are plenty of ethical debt relief and credit consulting firms, this sector of the financial industry remains a hotbed of fraud and deception. Before you seek debt relief, arm yourself with the knowledge of scammer tactics.
Contact
If you're in the market for debt relief, go shopping for an agency on your own. A credit counselor that calls you on the phone should raise a red flag. Legitimate debt relief agencies don't call you out of the goodness of their heart no matter what the salesperson on the other end of the line says. Never give out your private financial information over the phone unless you initiate the call and you know the person on the other end is reputable. Contact a local bank or the Chamber of Commerce and ask for a referral to a local agency.
Unfortunately, the Internet is teaming with scammers who send out mass emails, promising to reduce debt, lower monthly payments and interest rates, and wipe some debt totally off the books. Some of these crooks are very creative and highly skilled at creating authentic-looking websites. If you receive unsolicited emails offering debt relief, delete them and block the sender. Sometimes, just clicking on the links may transfer you to a site that attempts to leach private information from your computer.
Testimonials
Satisfied clients are the backbone of the success of any service-oriented company, and debt relief agencies are no different. However, just because you read a glowing testimonial doesn't mean that person even exists. Find your own references by inquiring among your acquaintances, religious groups, social clubs or just by talking to your neighbors.
Self-Serve
A legitimate debt relief agency may be able to negotiate with your creditors and get your debt reduced, but you can do the same thing on your own. Before contacting a credit counselor, call your creditors and explain the situation. Request a reduction in your balance or a lower interest rate. Make it clear that you are in dire straits and your next move is to consult a credit counselor. Many creditors will work with you in order to recover at least part of the money you owe them.
Resolve
Bypass the check-cashing stores that promise easy money now. The interest rates and fees they charge are very high, and the service will cost you much more in the long run. Consider borrowing from a relative until payday, and resolve to live within your financial means.
Solutions
Call the National Foundation for Credit Counseling (NFCC) to find ethical debt relief counselors in your community and report fraudulent debt relief scams to your State Attorney General's Office (see Resources below).
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