What Is the National Debt Relief Initiative?

The National Debt Relief Initiative, also known as the National Debt Relief Program, purports to be an agency working with clients to reduce or eliminate debt accrued from credit cards, loans and mortgages. The initiative also purportedly offers bankruptcy assistance and other financial services. Though it makes itself out to be a nonprofit, charitable organization, the initiative is a private, for-profit company and, according to the Better Business Bureau, a scam.

What It Is

The National Debt Relief Initiative, run by a Floridian financial solutions company called GHS Solutions, offers debt relief and consolidation services. While it appears on the surface that the company offers these services itself, the fine print reveals that the initiative purportedly acts as a middleman, connecting clients to a network of debt relief provides that do the actual work. As such, the National Debt Relief Initiative ultimately doesn't do anything other than assess a client's level of debt and suggest other companies that might help those clients reduce that debt, services for which it charges. Neither GHS nor the initiative hold accreditation with the Better Business Bureau.

How It Works

The National Debt Relief Initiative follows a carefully thought out pattern. The first step includes either an email or letter sent out to those with outstanding debts describing the manner in which the initiative helps clients eliminate as much as 50 percent of their debt. GHS Solutions designs letters that it appear as though they come from a governmental agency. Potential clients contact the initiative by telephone or an online form, submitting personal information along with a fee. This fee purportedly covers the work the company does to assess and reduce an individual's debt. However, the initiative never actually does anything for these clients and simply keeps the fee.

The fine print on the Initiative's website reads, "We do not guarantee that your debts will be reduced by a specific amount or percentage or that you will be debt-free within a specific period of time. We do not ... provide tax, bankruptcy, accounting or legal advice or credit repair services."

Legal Action

Idaho took legal action against GHS Solutions, LLC. According to the state's final ruling, GHS Solutions must refund all money paid to the company for debt relief assistance by state citizens since July 2008. Courts required GHS Solutions to make this amount, $303,218.23, available to the Idaho state government for dispersal to former clients of the company by June of 2011. The state included a fine of $15,000 in the judgment. GHS Solutions violated Idaho state law by providing unlicensed debt and credit counseling.

Debt Relief Assistance

The National Debt Relief Initiative is but one debt consolidation scam in a network of similar programs. The Federal Trade Commission warns consumers against accepting or soliciting the services of any debt relief company without physical offices. According to the commission, a number of legitimate enterprises, such as those run by universities, military bases, credit unions, housing authorities and branches of the U.S. Cooperative Extension Service, offer nonprofit credit counseling. Because of this, no citizen should resort to contact a company based solely online or that conducts business exclusively over the phone. Such companies can destroy consumer credit, cause tax problems and even expose consumers to potential lawsuits.